TCRLA_Public/020424.mbx        T R O U B L E D   C O M P A N Y   R E P O R T E R

                   L A T I N   A M E R I C A

            Wednesday, April 24, 2002, Vol. 3, Issue 80

                           Headlines


A R G E N T I N A

ARGENTINE BANKS: Government Proposes Merger To Redeem System
ARGENTINE BANKS: Closures Remain Pending Legislation Approval
HSBC: Continues to Evaluate Argentine Operations
REPSOL YPF: S&P Affirms YPF SA Notes Rating; Off Watch
REPSOL YPF: Shares Down On Nationalization Reports
REPSOL YPF: Delays Dividend Payments Due To Argentina's Woes
SCOTIABANK QUILMES: Experts Expect No Future Recapitalization
SCOTIABANK QUILMES: S&P Cuts Ratings Operations' Suspension
TRANSENER: Suspends Payments; Morgan Stanley Advising New Plans


B R A Z I L

CEMIG: Shareholders Vote On Capital Increase Plan By Month End
EMBRATEL: Reports 1Q02 Revenues of BRL1.8 Bln; Business Stable


C H I L E

EDELNOR: Has Until June 15 To Honor Norandino Guarantees
MANQUEHUE NET: Rating Agencies Doubt Work Out Plan Possible


M E X I C O

AEROVOX INC.: To Sell Mexican Unit Through Bankruptcy Process
AEROVOX INC.: Company Profile
CINTRA: IPAB, CFC and SCT To Hold Sale Discussions This Week
GUILFORD MILLS: Mexican Plant Closure Part of Growth Strategy
HYLSAMEX: Receives Majority of Notes; Tender Offer Extended
MEXICANA: Continues to Update and Modernize Fleet
P&M: To Close Mexican Mining By Third Quarter This Year


P A R A G U A Y

CORPOSANA: Only 6 Firms Submit Background Documents to Qualify


     - - - - - - - - - -


=================
A R G E N T I N A
=================

ARGENTINE BANKS: Government Proposes Merger To Redeem System
-------------------------------------------------------------
The Argentine government is stepping up efforts to salvage the
country's staggering financial system. In an AP report, Eduardo
Amadeo, spokesman for President Eduardo Duhalde, revealed that
the Argentinean government would present a bill to legislators
this week creating the Banco Federal Nacional, which would be a
merger of Argentina's largest bank, Banco de La Nacion and
investment bank, Banco de Inversion y Comercio Extranjero.

Amadeo also revealed that the government said it was inviting all
provincial and municipal banks to join the merger, including the
government-run banks of Buenos Aires province and the city of
Buenos Aires, two of Argentina's largest. The measure, according
to Amadeo, is designed to strengthen the banking system.

"We need an efficient public banking system," he said. "The
intention is to have stronger, more solid banks, so that they can
make loans."

Argentina is in the midst of its worst economic downturn, with
four years of recession reaching its crescendo in recent months.
The government defaulted on its US$141-billion public debt in
December and undertook a steep devaluation of the currency from
January.


ARGENTINE BANKS: Closures Remain Pending Legislation Approval
-------------------------------------------------------------
Argentine President Eduardo Duhalde said officials are working to
end the country's banking suspension, which began Friday, relates
Dow Jones.

"The banks won't be closed indefinitely... It's absurd in a
capitalist system the banks don't work," Duhalde said.

According to the president, the nation's banking crisis will take
at least "a couple of months" to correct.

Duhalde spoke as draft legislation aimed at slowing the loss of
bank deposits was sent to the Congress. The legislation includes
offering depositors with cash frozen in the country's banks new
five- and 10-year government bonds. Plaintiffs who win lawsuits
against Argentina's five-month limits on bank withdrawals will be
forced to accept these bonds instead of cash.

The bonds will be negotiable and holders "can be used to buy all
sorts of goods" and services "so they will maintain their value,"
Duhalde said.

Argentina's banks are to remain closed until that law passes both
the Senate and the Chamber of Deputies. Economy Minister Jorge
Remes Lenicov said he expects Congress to approve the new law on
bonds by Tuesday evening or Wednesday.


HSBC: Continues to Evaluate Argentine Operations
------------------------------------------------
HSBC Holdings Plc, Europe's largest bank by market value, is
reviewing the future of its operations in Argentina, where it
lost US$1.1 billion.

The review, according to a report by AFX, comes after the
Argentine Central Bank declared a "banking and foreign exchange
holiday" on Friday on fears that a court ruling allowing account
holders to recover their funds would cause a rush on the banks.

HSBC is not currently proposing a withdrawal from the Argentine
market saying, "we do invest in countries in the long term and we
do hope to be in a position to participate in their financial
system... But it is possible that we review this policy,"
according to an HSBC spokesman.

HSBC had previously said it would exit Argentina if the economic
crisis continues. However, according to the spokesman, the bank,
which has already set aside US$1.2 billion to cover its exposure
for non-performing loans and bad debts in Argentina, is waiting
to find out more about the situation this week before taking any
decisions.

In view of the bank's "consistent and conservative provision
policy," he said a further increase in provisions was unlikely
for the time being.

Some sector analysts have suggested that HSBC may have to raise
its provisions by up to around US$300 million in view of the
worsening economic crisis in Argentina. But the bank's spokesman
dismissed this as mere speculation.

CONTACT:  HSBC HOLDINGS PLC
          10 Lower Thames St.
          London EC3R 6AE, United Kingdom
          Phone: +44-020-7260-0500
          Fax: +44-020-7260-0501
          Home Page: http://www.hsbc.com
          Contacts:
          Sir John R. H. Bond, Group Chairman / Exec. Dir.
          Sir Brian Moffat, Deputy Chairman / Sr. Non-Exec. Dir.
          Keith R. Whitson, Group Chief Executive


REPSOL YPF: S&P Affirms YPF SA Notes Rating; Off Watch
------------------------------------------------------
Standard & Poor's affirmed Monday its 'BB+' rating on Argentina-
based YPF Sociedad Anonima's (YPF) structured export notes (SENs)
and removed them from CreditWatch where they were placed on
Janurary 23, 2002.

The notes are secured by an assignment to the trustee of rights
to receive payments under the oil purchase agreement entered into
between YPF and Empresa Nacional del Petroleo (ENAP).

The rating action follows the affirmation of the 'BB+' local
currency and 'B+' foreign currency corporate credit ratings on
Argentine oil and gas company YPF. The 'BB+' foreign currency
rating on the SENs remains three notches above the foreign
currency rating of YPF, reflecting Standard & Poor's opinion that
the government will continue to grant the SENs exclusions from
any repatriation requirements. The rating affirmation is based on
the release of financial statements that confirm Standard &
Poor's expectations of a significant debt reduction as of
December 2001, thereby lowering immediate refinancing risks.
Additionally, the foreign currency rating of YPF was removed from
CreditWatch, where it was placed on Jan. 23, 2002.

With sales of $8.1 billion for 2001, YPF is Argentina's largest
company and Latin America's fourth-largest integrated power
company. The existence of cross-default clauses and the strong
performance of YPF's operations provide significant incentives
for Repsol-YPF S.A. to support its Argentine operation. The
cross-default clauses specify that Repsol would incur an event of
default on its bonds if any principal subsidiary, including YPF,
defaulted on more than US$20 million of debt obligations.
Nevertheless, Standard & Poor's continues to maintain a
significant differential between the ratings on Repsol and YPF,
given Repsol's statements that it would not necessarily support
YPF in the case of a direct intervention by the Argentine
government.

Besides fluctuation in oil prices, future financial performance
will be conditioned by the effects of the currency devaluation
and the new economic environment in Argentina. The most important
factors affecting profitability are a 20% export duty on crude
oil exports and a 5% export duty on refined product exports, and
the pesification of natural gas tariffs. Additionally, the threat
of potential retail price controls could lead to a deterioration
of margins.

YPF is a major integrated energy company, operating in an
industry with highly volatile international prices. Its reserves
are geographically concentrated in Argentina, which has a highly
uncertain, challenging, and rapidly changing economic
environment.

Argentine regulations currently exclude the SENs from
repatriation requirements. Standard & Poor's will review the
impact that any changes to current regulations may have on the
SENs. Any changes to the regulations that affect the future oil
exports from YPF to ENAP under the oil contracts securing the
repayment of the listed notes, or changes that affect the
company's ability to maintain the offshore accounts, would
negatively affect the rating on the SENs.

RATINGS AFFIRMED AND REMOVED FROM CREDITWATCH

Transaction                                  Rating
                                         To         From
YPF Sociedad Anonima
$400 mil 8.95% structured export notes  BB+      BB+/WatchNeg
$400 mil 7.50% structured export notes  BB+      BB+/WatchNeg
$100 mil 7.00% medium-term notes        BB+      BB+/WatchNeg

CONTACT:  STANDARD & POOR'S
          Jorge Solari, +54-114-891-2114
          Juan Pablo De Mollein, +54-114-891-2113
          Nancy Gigante Chu, +1-212-438-2429
          Pablo Lutereau, +54-114-891-2125


REPSOL YPF: Shares Down On Nationalization Reports
--------------------------------------------------
Shares in Repsol YPF SA were sharply lower in late Monday morning
trading following a report in a La Vanguardia newspaper that
Argentine legislator for the Polo Social Daniel Carbonetto will
propose to President Eduardo Duhalde a plan to nationalize YPF.

"Repsol YPF's getting hit on speculation that the Argentine
government will decide to nationalize YPF as part of a plan aimed
at boosting state revenues," said a dealer at a leading Spanish
bank.

At 11.38 am, the stock was down EUR0.2 or 1.39 percent at
EUR14.18, near a low of EUR14.11, on volume of 1.46 million
shares.

CONTACTS:  REPSOL YPF
           Alfonso Cortina De Alcocer, Chairman & CEO
           Ramon Blanco Balin, Vice Chairman
           Carmelo De Las Morenas Lopez, CFO

           Their Address:
           Paseo de la Castellana 278
           28046 Madrid, Spain
           Phone   +34 91 348 81 00
           Home Page: http://www.repsol.com
           or
           Av. Roque S enz Pe a, 777.
           C.P 1364. Buenos Aires
           Argentina


REPSOL YPF: Delays Dividend Payments Due To Argentina's Woes
------------------------------------------------------------
Repsol-YPF SA won't be paying a final dividend on its 2001
earnings due to the economic crisis in Argentina. The country is
home to a significant part of its asset base, says Dow Jones.

However, according to Repsol-YPF SA Chairman Alfonso Cortina, the
Company plans to resume "the normal trend in dividend payouts,"
once the economic situation in Argentina stabilizes.

"The objective for profit this year will depend, as is logical,
on the evolution of Argentina...but until the situation there
stabilizes, it's very hard to establish a profit objective,"
Cortina said.

On the positive side, Cortina said that its outlook had improved
recently thanks to higher oil prices and its chemical operations,
where margins in many products improved in April for the first
time in many months.

Also, the Company was reaching agreements in Argentina that could
allow it to pass higher oil costs on to end-users, Cortina said.


SCOTIABANK QUILMES: Experts Expect No Future Recapitalization
-------------------------------------------------------------
Bankers and analysts said that Argentine bank Scotiabank Quilmes,
whose operations were halted for 30 days by the Central Bank, is
likely to be torn apart and auctioned off instead of being
recapitalized, says Reuters.

Quilmes' parent, Canadian bank Bank of Nova Scotia, said on
Friday it had already made full provisions for its local unit.

"This is a liquidity problem and a question of whether head
office wants to send money, which it does not, so for me the end
result of this is it will be sold," one local banker said on
condition of anonymity.

The Canadian bank took a CAD540-million (US$320 million) charge
on Scotiabank Quilmes in its first-quarter profits in early
March, effectively writing down the entire value of the local
unit and eliminating financial costs of walking away, analysts
revealed.

In that case, Argentina's bank act gives the Central Bank three
options: ask the courts to declare Scotiabank Quilmes bankrupt;
sell the bank as a whole; or auction off its different businesses
separately.

According to lawyers, current Argentine law does not force
foreign banks to inject funds from abroad to shore up local
units.

"Whether a bank buys Scotiabank Quilmes depends on the future
business outlook. If they think it will be impossible to operate
in Argentina, no one will want to stay," one banking sector
analyst said.

CONTACTS:  SCOTIABANK QUILMES
           Alan Macdonald
           Chief Executive Officer
           Phone: (54-11) 4338-8000
           Fax: (54-11) 4338-8033
           Mail: 6th Floor
           Gral. J.D. Peron 564
           (C1038AAL) Buenos Aires

           Roy D. Scott
           Vice-President and Managing Director, Latin America
           Phone: (54-11) 4394-8726
           Fax: (54-11) 4328-1901
           Mail: P.O. Box 3955
           C1000WBN Correo Central
           Buenos Aires, Argentina
           E-mail: scotiarep@sinectis.com.ar


SCOTIABANK QUILMES: S&P Cuts Ratings Operations' Suspension
-----------------------------------------------------------
The suspension of Scotiabank Quilmes' operations by the Argentine
Central Bank prompted international rating agency Standard &
Poor's to cut its rating on the Argentine bank to default (Dpi)
from selective default (SDpi).

"Like most Argentine banks, Scotiabank Quilmes has been suffering
significant liquidity and asset quality pressures in a very
complex operating environment, characterized by significant
change in rules, including the devaluation of the Argentine peso
and the overall loss of confidence in the Argentine financial
system," credit analyst Cristian Krossler said.


TRANSENER: Suspends Payments; Morgan Stanley Advising New Plans
---------------------------------------------------------------
Argentine electric power company Transener SA said it had
suspended all current and future loan payments, both on principal
and interest, pending the renegotiation of its US$470 million in
debts, reports Dow Jones.

The company, majority-owned by Britain's National Grid Group PLC
(NGG) and local energy giant Perez Companc SA (PC), has selected
Morgan Stanley as financial advisor to help in developing a
restructuring plan for all its debts.

According to Carlos A. Gonzalez, Transener's finance and
administration manager, about US$250 million of Transener's debt
is corporate bonds. About US$100 million of the bonds mature in
2003 and US$150 million mature in 2008, Gonzalez said.

The Company has US$180 million in bank debt due this year and
US$40 million worth of bank debt due in 2003, Gonzalez added.

On Friday international credit rating agency Standard & Poor's
(S&P) lowered its local currency corporate credit rating on
Transener to SD (selective default) from CC. The Company's
foreign currency corporate credit rating remains at SD, S&P said.

The downgrade came after the Company's failure to meet a US$20-
million principal payment due April 5. The payment had a grace
period of 10 business days after the maturity date. The Company
also failed to meet a US$230,000 interest payment, S&P said.

Transener's financial situation has been negatively affected this
year by continued peso devaluation, the pesofication of tariffs,
and a liquidity squeeze in the financial system, credit analyst
Sergio Fuentes said.

The prolonged period announced by the government to renegotiate
concession contracts adds uncertainty over the Company's cash
flow going forward, S&P added.

Transener has 14,200km in transmission lines, including 5,500km
of network belonging to subsidiary Transaba.

CONTACT:  COMPANIA DE TRANSPORTE DE ENERGIA ELECTRICA EN ALTA
          TENSION (Transener S.A.)
          Av. Paseo Colon 728, 6"Piso - (1063)
          Buenos Aires, Argentina
          Tel. (5411) 4342-6925

          Business Development:
          Carlos A. Jeifetz (jeifecar@transx.com.ar)
          Gerardo Baseotto (baseoger@transx.com.ar)
          Tel.: (54-11) 4334-0182 / 4342-6925
          Fax: (54-11) 4342-4861

          MORGAN STANLEY, DEAN WITTER & COMPANY
          1585 Broadway
          New York, New York 10036
          United States
          Phone: +1 212 761-4000
          Home Page http://www.msdw.com



===========
B R A Z I L
===========

CEMIG: Shareholders Vote On Capital Increase Plan By Month End
--------------------------------------------------------------
Shareholders of Brazil's Minas Gerais state integrated power
company Cemig are to vote on April 30 a plan to up its capital by
BRL30 million (US$12.8mn), reports Business News Americas, citing
IR director Luiz Fernando Rolla. The operation is scheduled to
take place in May on a proposal that would give shareholders two
shares for each hundred they currently own.

The move is part of a payment by the government of Minas Gerais
of the CRC account that existed up to 1993 to compensate
companies for cost fluctuations.

Minas Gerais state owes almost BRL1.5 billion from the CRC, and
Cemig is negotiating this debt with the federal government with a
view to receiving federal funds to cover losses due to
electricity rationing.

Cemig is 51-percent controlled by Minas Gerais, and 33-percent
owned by US-based AES and Mirant and the Opportunity Fund. The
utility provides services to 5.41 million clients in 778
municipalities in Minas Gerais.

CONTACT:  CEMIG
          Avenida Barbacena, 1200
          Sto Agostinho  30123-970 Belo Horizonte - MG
          Brazil
          Phone   +55 31 299 4900
          Home Page http://www.cemig.com.br
          Contacts:
          Djalma Bastos De Morais, Chairman
          Geraldo De Oliveira Faria, Vice Chairman
          Cristiano Correa De Barros, Finance Director


EMBRATEL: Reports 1Q02 Revenues of BRL1.8 Bln; Business Stable
--------------------------------------------------------------
Embratel Participacoes S.A., the Company that holds 98.8 percent
of Empresa Brasileira de Telecomunicacoes S.A. ("Embratel"),
officially announced results Monday for the quarter ending March
31, 2002. All financial figures are in Reais and based on
consolidated financial statements in "Legislacao Societaria".

Long distance voice traffic volume reflected improvement in call
management.

The implementation of the collections system - CACs - and the
second phase of the call management system - Infusion (Embratel
Call Management System - "ECMS"), were completed during the
quarter on schedule. Collections and call management efficiency
are improving. First quarter net revenues of R$1.8 billion
dropped slightly year-over-year due to emphasis on providing
services to paying customers.

Refinancing program completed in the quarter - net debt position
maintained.

Embratel refinanced debt maturing in 2002 in the first quarter of
2002. Refinancing program for 2002 is completed.

Data business is sound and growing despite price reductions.

Data revenues declined 2.1 percent to R$450 million year-over
year. However, average megabit/equivalent volume growth exceeded
40 percent over the past year showing that our basic business is
very sound and continuing to grow.

Embratel generated a positive cash flow - first quarter 2002
EBITDA of R$333 million.

Embratel's first quarter EBITDA met capex and net interest
expense needs in the quarter.

    Data Communication Services

    Focusing on cash and profitable growth

Data communications revenues declined 2.1 percent to R$450
million compared to the first quarter of 2001. Compared to the
previous quarter, data revenues fell 2.5 percent. The reduction
in data revenues was caused by a) contracts being renewed at
current price levels; b) general reduction in Internet services
prices (see February 5, 2002 Earnings Release) intended to drive
further growth and insulate Embratel from competitors; and c)
anticipated declines in wholesale revenues.

Embratel has been focusing its growth on high return sales and on
winning profitable contracts. This strategy is consistent with
our primary objective of cash generation and returns.

Despite the reduction in prices, volume growth is healthy. In 2
Mbits equivalent basis circuits volumes grew more than 40 percent
year-over-year and 13 percent quarter over-quarter. In addition,
Embratel's client base continues to increase. "This shows our
data business is very sound and continuing to grow", said Jorge
Rodriguez, Embratel's President and CEO.

Also during the quarter, Embratel won significant contracts:
Embratel was awarded the contract to provide telecommunications
services to Banco Postal (5,000 locations throughout Brazil) and
to provide Banco do Brasil's worldwide network. In addition,
Embratel was appointed to be Shell Brazil's sole
telecommunications provider including a complete range of data
(frame relay, direct links, Global VPN, etc.) as well as voice
services (VipPhone, 0800, Sempre 21, among others). In these
transactions Embratel competed against local and foreign
providers.

    Voice Services

    Active call management strengthens results

During the quarter Embratel continued to improve the
collectibility of revenues by filtering the non-performing
traffic through ECMS. On average, approximately 2.5 million lines
were prevented from completing calls using the Embratel code
throughout the quarter. Voice traffic and revenues fell
accordingly. Embratel views the reduction in traffic positively
since it is an important step in the direction of reducing
uncollectible accounts and the related interconnection costs.

    Domestic Long Distance

Domestic long distance revenues were flat at R$1.1 billion in the
first quarter of 2002 compared to the same 2001 quarter. Relative
to the fourth quarter of 2001, domestic long distance revenues
declined 1.9 percent. The main causes for this reduction were the
interruption of non-paying traffic and the seasonal impact of the
holiday period. Call management has a more significant impact on
residential traffic.

    International Long Distance

International long distance revenues were R$173 million in the
first quarter of 2002 representing a decline of 21.5 percent when
compared to the same quarter of the previous year. Compared to
the fourth quarter of 2001, international long distance fell 5.5
percent. Price reductions and ECMS were responsible for the
decline in international long distance revenues in the quarter.
Both outbound and inbound rates decreased by 16 percent year-
over-year. Also, lower traffic to and from Argentina contributed
to a reduction in volumes year-over-year. These factors were
responsible for the bulk of the revenue reduction in the period.

Embratel expects a continued decline in revenues from this
segment due to price reductions.

    EBITDA

EBITDA was R$333 million in the first quarter of 2002. Compared
to an effective quarterly EBITDA run rate of approximately R$250
million in 2001, this represents a significant increase. The
reduction in the provision for doubtful receivables was the
primary reason for improvement in the EBITDA.

Embratel provisioned R$174 million for doubtful receivables in
the first quarter of 2002. This amount corresponds to 9.7 percent
of net revenues. When compared to the average level of provisions
taken in 2001 - 15.5 percent, it represents a substantial
reduction. This decrease is conforming with our policy of
provisioning all voice receivables past due above 120 days. Thus,
the amount provisioned in the quarter is largely related to bills
from calls made in the months of August to October when current
capabilities were not yet fully in place.

While the tools Embratel implemented to manage billing and
collections have greatly enhanced the company's ability to deal
with uncollectibles we expect the level of provisioning to remain
high in the short term due to the lag which exists between the
provisioning deadline and the initiation of massive call
selection.

    Financial Position and Interest Expenses

Embratel Participacoes ended the quarter with a cash position of
R$662 million. Total debt outstanding as of March 31, 2002 was
R$3.7 billion (net debt of R$3.1 billion). R$1.2 billion
corresponded to short term debt and current portion of long term
debt.

As previously announced, Embratel concluded in the quarter its
2002 refinancing program. The major part of this program consists
of a syndicated loan of US$270 million. Another US$35 million of
trade related finance structured in April completed core 2002
financing needs. Excluding the repayment of a bridge loan of US$
161 million, the Company paid approximately US$308 million of
interest, principal, related taxes and commissions during the
quarter. "We are satisfied to have completed Embratel's
refinancing needs for 2002 while maintaining favorable terms in a
very challenging financing environment" said Jose Maria Zubiria,
Embratel's CFO.

While Embratel's debt profile continues to be primarily
denominated in foreign currencies, portions of this debt have
been swapped to the Real according to Exhibit 10 (see link
below).

The March 31, 2002 end of quarter hedge position does not include
another US$100 million that were hedged on April 2, 2002. If this
amount is included, short term hedged debt increases to 65.5
percent and total hedged debt increases to 44.8 percent. Compared
to December 31, 2001 short term hedged debt also rose from 62.8
percent. Embratel continues to pursue hedging opportunities to
fulfill it's policy of hedging all new debt under 3 years
maturity and will continue to hedge as market conditions permit.

Star One, Embratel's satellite subsidiary, has finalized the
plans to launch a Ku-band satellite for broadband internet
services, covering Latin America. The total investment over 3
years for this project is approximately US$250 million, including
the satellite, launch services, insurance and taxes. In April,
Star One entered into a contract with BNP Paribas to finance 85
percent of the satellite. This a 10 year loan with 3 years of
grace period, reflecting the time to manufacture the satellite,
with an all in cost of 9% per annum. Approximately US$40 million
to US$50 million will be spent in 2002 and this amount is within
Embratel's total projected Capex plan of R$1.1 billion.

    Net Income

The net loss for the first quarter of 2002 was R$36 million. In
addition to the factors mentioned above, the loss includes the
impact of higher financial costs on hedged debt despite the fact
that the devaluation of the real had little impact on the
Company's foreign currency debt (see Financial Position above).
In the first quarter of 2001 the company's net loss was R$34
million.

    Accounts Receivables

The Company's net receivable position on March 31, 2002 was R$1.9
billion, representing a slight improvement in collections and an
increase in the provision for doubtful accounts. On March 31,
2002, the balance of this provision was R$1.6 billion. Gross
receivables were flat R$3.4 billion in the first quarter of 2002
(Exhibit 12 and 13 (see link)). Note there are zero unprovisioned
voice receivables above 120 days.

Co-billing has initiated with CTBC and Telemar. We expect to
reach an agreement with Telefonica in the second quarter. We
expect co-billing to eventually attenuate lack of payments
because of incorrect or insufficient addressing information as
well as offering clients an additional option for bill payment.

    Capital Expenditures

In the first quarter capital expenditures were R$248 million. The
breakout of this expenditure is: local infrastructure and access
- 26.2 percent; data and Internet services - 36.9 percent;
network infrastructure - 8.6 percent and others - 28.4 percent.

Embratel expects to be cash flow positive (after capex and
interest expenses) in 2002.

    Local Services

Embratel has completed its Universalization obligations. Embratel
is ready to initiate the providing local services as soon as
Anatel grants the license. Anatel's regulatory deadline to issue
Embratel's universalization target completion certificate expired
on March 22, 2002. We expect Anatel to grant us our certification
at any moment.

Petition - Anti-competitive Practices (Representacao por Infracao
da Ordem Economica)

On April 15, 2002 Embratel and Intelig filed a petition to Cade
(the Brazilian Anti-Trust Commission) via Anatel, which contains
indications that Telemar, Brasil Telecom and Telefonica are
engaging in illegal anti-competitive practices with respect to
the interconnection rates charged to competitive long distance
providers. Based on the analysis of publicly available financial
information we show that either local/regional telcos charge
their own long distance concessions a lower interconnection rate
compared to those charged to the long distance carriers - a
breach of the rule of equal treatment to all concessions; or
their long distance concession is loss making at the operating
level, in which case they are subsidizing their long distance
concession through the interconnection revenues paid to their
local concession. Also a violation of competitive rules.

    In this petition Embratel requests:

1) That Anatel immediately demands that local/regional operators
present separate financial statements for each concession (local
and long distance) in accordance to article 96 of the General
Telecommunications Law, showing the TU-RL tariffs charged to
other long distance concessions and to their own; 2) That the
interconnection rate be determined according to a formula whereby
the highest TU-RL rate charged in its concession region(A) be
lower than the lowest tariff charged to an end customer in its
concession region(B) minus the highest TU-RIU charged in its
concession region (C) or A less than (B-C).

3) Should Anatel decide not to adopt the above formula (2) for
interconnection pricing, that it demands the local/regional
company charge other long distance concessions an interconnection
rate that given the prices it practices to end customers, will
make its long distance concession cash positive;

4) Lastly, given the risks of elimination of the competitive
environment, Embratel requests that these companies not be
granted licenses to operate in the inter-regional and         
inter-national long distance markets until such anti-competitive
practices are stopped.

    Creation of Business Units

Early this month, Embratel created two business units: a
Residential & Small Company business unit and a Large & Medium
Company business unit. "The purpose of this reorganization is to
enhance focus and client orientation thereby raising the level of
excellency in client services as well as increasing the agility
and efficiency of our actions" said Jorge Rodriguez, Embratel's
CEO. "The ultimate result we aim to achieve with this client
focused organizational structure is to grow revenues and margins,
generating cash and returns."

The Large & Medium Company business unit, to be headed by Eduardo
Levy, will provide voice, data and network services to government
entities and companies, and to large and medium businesses. The
Residential & Small Company business unit will provide voice and
data services to the residential and small business market. It
will be headed by Jose Maria Zubiria who will continue as
Embratel's CFO until the appointment of a successor.

Embratel is the premier communications provider in Brazil
offering a wide array of advanced communications services over
its own state of the art network. It is the leading provider of
data and Internet services in the country. Service offerings
include: advanced voice, high-speed data communication services,
Internet, satellite data communications and corporate networks.
Embratel is uniquely positioned to be the all-distance
telecommunications network of South America. The Company's
network is has countrywide coverage with 28,868 km of fiber
cables comprising 1,068,657 km of optic fibers.

To see exhibits and financial statements:
http://bankrupt.com/misc/Embratel.txt

CONTACT:  EMBRATEL PARTICIPACOES S.A.
          Investor Relations
          Silvia Pereira
          Tel. (55 21) 2519-9662
          Fax: (55 21) 2519-6388
          Email: Silvia.Pereira@embratel.com.br
                 invest@embratel.com.br
                  or
          Press Relations:
          Helena Duncan/Mariana Palmeira
          Tel: (55 21) 2519-3653/3654
          Fax: (55 21) 2519-8010
          Email: hduncan@embratel.com.br
                 mpalm@embratel.com.br



=========
C H I L E
=========

EDELNOR: Has Until June 15 To Honor Norandino Guarantees
--------------------------------------------------------
Chilean power generator Edelnor informed the Santiago bourse that
it managed to persuade natural gas distributor Norandino to
extend guarantees for the transport of gas, from April 22 to June
15, relates Business News Americas.

Edelnor was allowed such an extension to have enough time to tell
Norandino how it will continue to honor guarantees in a gas
transportation agreement (GTA), provided the generator fulfils
its payment obligations under the GTA, Edelnor said.

"The GTA stipulates that if Edelnor does not achieve a rating of
BB+ from Standard & Poor's, it must authorize a contract
compliance guarantee, a personal guarantee authorized by former
Edelnor controller Mirant Company," Edelnor said.

Edelnor, which is 82.3-percent owned by Chilean company FS
Inversiones, has two coal-fired generators - 166MW Mejillones I
and 175MW Mejillones II - and the 250MW natural gas-fired plant
Mejillones III. All three are situated in the city of Mejillones
in northern Chile's Region II.

CONTACT:  Empresa Electrica Del Norte Grande SA (EDELNOR)
          Avenida Grecia 750
          Antofagsta, Chile
          Phone: +56 55 248500
                 +56 55 248094
          Contact: Fernando del Sol, Chairman


MANQUEHUE NET: Rating Agencies Doubt Work Out Plan Possible
-----------------------------------------------------------
Chilean competitive local exchange carrier Manquehue Net had its
bonds downgraded by two rating agencies on uncertainty concerning
the Company's ability to carry through on its business plan.

Feller Rate cut the rating from A- to BB+ with outlook as yet
undetermined, while Fitch Ratings agency altered its rating from
BB+ to BB- with positive outlook.

Feller Rate has concerns about Manquehue's sales goals for high
traffic telephony and broadband lines, while Fitch sees a greater
probability that bondholders will demand advance redemption of
the bonds.

In March, Manquehue said it had hired Dutch investment bank ABN
Amro to help search for a strategic partner. Feller Rate noted
that this move indicated that shareholders themselves were
equally doubtful about those goals, and are not prepared to
invest more in the Company themselves.

The agency noted that from mid-2001 a general decline in demand
for local telephony prevented the Company from fulfilling
projected expansion, despite high investment in information
systems.

Manquehue ended 2001 with a net loss of CLP11.3 billion (US$17.3
million), which is equivalent to a 10-percent cut in the
Company's average equity.

To see financial statements:
http://bankrupt.com/misc/Manquehue.doc



===========
M E X I C O
===========

AEROVOX INC.: To Sell Mexican Unit Through Bankruptcy Process
-------------------------------------------------------------
Aerovox Incorporated ("Aerovox") reached agreements Friday with
Parallax Power Components L.L.C. ("Parallax") to sell its U.S.
based film capacitor and EMI filters business and Nueva
Generacion Manufacturas, S.A. de C.V. ("NGM") to sell its Mexico
City film and electrolytic capacitor business. Also on Friday,
Evox Rifa Group OYJ ("Evox Rifa") was awarded the winning bid in
Aerovox's sale of its United Kingdom subsidiary, BHC Aerovox Ltd.

"From the perspective of our customers and vendors, these
transactions eliminate the financial uncertainties that we have
lived with since filing for bankruptcy protection last year,"
said Robert D. Elliott, president and CEO. "Our customers have
been phenomenally supportive over the past eleven months and I'm
pleased that they will be able to continue to purchase quality
capacitors made by the same dedicated people who have serviced
their needs for many years."

Parallax owns a film capacitor manufacturing plant in Bridgeport,
Connecticut, which was purchased from Magnetek Incorporated last
year. The combined film capacitor business will be a strong
competitor in the motor and lighting capacitor marketplace, and
the engineering and operational synergies created in the
acquisition will improve its position in a number of profitable
niche markets.

NGM is purchasing Aerovox's capacitor manufacturing assets in
Mexico City, Mexico, which include both electrolytic and film
capacitor lines. Both the Parallax and NGM deals are subject to
U.S. Bankruptcy Court approval.

Evox Rifa, based in Finland, becomes the leading European
electrolytic capacitor manufacturer with its acquisition of BHC
Aerovox, Ltd. The management of Evox Rifa believes that
substantial synergy benefits will accrue to the company from the
acquisition. Economies of scale, stronger R&D efforts, focused
investment strategies and a broader customer base will strengthen
Evox Rifa's presence in the global market.

Aerovox, a debtor-in-possession under Chapter 11 of the United
States Bankruptcy Code, manufactures film, paper and aluminum
electrolytic capacitors. The Company sells its products
worldwide, principally to original equipment manufacturers as
components in electrical and electronic equipment.

CONTACT:  AEROVOX INC.
          F. Randal Hunt
          Tel. (508) 910-3200


AEROVOX INC.: Company Profile
-----------------------------
NAME: Aerovox Inc.
167 John Vertente Boulevard
New Bedford, MA 02745-1221

PHONE: 508-994-9661
  
FAX: 508-995-3000

EMAIL: lbelliveau@aerovox.com

WEB SITE: www.aerovox.com

EXECUTIVE MANAGEMENT TEAM:
     Robert D. Elliott, President and Chief Executive Officer
     F. Randal Hunt, Senior Vice President, Finance and CFO
     Martin Hudis, Senior Vice President, Technology Development
     Enrique Sanchez Aldunate, Senior Vice President
     Graham Yates, Senior Vice President

INVESTOR RELATIONS:
      Lauren Belliveau
      Phone: 508-994-9661
      FAX: 508-910-3123
      Email: lbelliveau@aerovox.com

TYPE OF BUSINESS: Aerovox manufactures AC capacitors, DC film
capacitors, aluminum electrolytic capacitors, power factor
correction capacitors, and EMI filters. The company sells its
products worldwide, primarily to original equipment manufacturers
(OEMs) of electrical and electronic equipment. Markets for
Aerovox products include motors, lighting fixtures, power
electronics, medical and industrial equipment, experimental
physics, traction drives, high voltage power supplies, and flash
lamps.
The company's manufacturing operations are located in New
Bedford, Massachusetts; Huntsville, Alabama; Juarez and Mexico
City, Mexico; and Weymouth, England. The shares of Aerovox
Incorporated trade on Pink Sheets under the symbol ARVXQ.

SIC: Electronics - Miscellaneous Electronics

EMPLOYEES: 1591 (last reported count)

TRIGGER EVENT:  On June 6, 2001, Aerovox filed a voluntary
petition for bankruptcy protection, on behalf of its U.S.
operation, under Chapter 11 of the U.S. Bankruptcy Code. The
Company is currently operating as a debtor-in-possession pursuant
to the Bankruptcy Code.

SALES: $109.7 million (Q ended Mar 2001)

TOTAL ASSETS: US$ 85.5 million (Q ended Mar 2001)

TOTAL LIABILITIES: US$ 69.8 million (Q ended Mar 2001)

REVENUES: US$ 28.2 million (Q ended Mar 2001)

PUBLIC SECURITIES:  6.15 million outstanding shares (Q ended
                    Mar 2001)

BANKRUPTCY JUDGE: Joan N. Feeney
                  United States Bankruptcy Judge


CINTRA: IPAB, CFC and SCT To Hold Sale Discussions This Week
------------------------------------------------------------
A meeting is scheduled for this week to review the sale of
Cintra, the holding company that manages Mexico's leading
airlines Aeromexico and Mexicana, reveals Mexico City daily el
Economista.

Among those attending the meeting are the heads of the Institute
for Bank Savings Protection (IPAB) and the Federal Competition
Commission (CFC), and officials from the Secretariat of
Communications and Transport (SCT).

Juan Manuel Duarte, president of the Transportation Commission of
the Chamber of Deputies, confirmed that there was a proposal to
sell the airlines together. However, he still believes that the
decision to sell them separately was a good one.

Duarte said Mexican investors should keep control of the
airlines, since the Foreign Investment Law limits foreign
participation to 25 percent.

CONTACT:  CINTRA
          Jaime Corredor Esnaola, Chairman
          Juan Dez-Canedo Ruiz, CEO
          Rodrigo Ocejo Rojo, CFO

          Xola 535, Piso 16, Col. del Valle
          03100 M,xico, D.F., Mexico
          Phone: +52-5-448-8050
          Fax: +52-5-448-8055

          OR
          C.P. Francisco Cuevas Feliu, Investor Relations
          Xola 535, Piso 16
          Col. del Valle
          03100 M,xico, D.F.
          Tel. (52) 5 448 80 50
          Fax (52) 5 448 80 55
          infocintra@cintra.com.mx

          AEROMEXICO
          Mayte Sera Weitzman of AeroMexico, +1-713-744-8446, or
          mweitzman@aeromexico.com

          MEXICANA DE AVIACION
          Jenny Jenks, Marketing Director, International
          Division of Mexicana Airlines, +1-210-491-9764, or
          ennyjenks@mexicana.com



GUILFORD MILLS: Mexican Plant Closure Part of Growth Strategy
-------------------------------------------------------------
Guilford Mills, Inc. announced Monday two developments designed
to strengthen the company's financial position: court approval of
its revolving credit arrangement, and a management decision to
exit a portion of its circular knit apparel fabric business in
order to focus the company on its core operations. Those core
businesses include worldwide automotive, technical textiles and
American Textil.

A U.S. Bankruptcy Court has given final approval for Guilford
Mills' debtor-in-possession financing, giving the company
additional liquidity for the duration of its bankruptcy period.
The D-I-P credit facility, provided by Wachovia, is for up to $30
million.

Guilford Mills filed its reorganization petition with the court
on March 13 after it had already reached consensus with its major
lenders on most key reorganization issues. Because these issues
were worked out at such an early stage, Guilford expects to
emerge from bankruptcy proceedings this summer.

"This is a very important vote of confidence. Together with the
incredible support we've received from our lenders, customers,
vendors and associates, it gives us very positive momentum toward
our reorganization goals," said John A. Emrich, Guilford Mills
President and Chief Executive Officer.

Emrich also announced that the company's plans to focus on more
favorable growth businesses will result in the closure of its
apparel plant in Altamira, Mexico, and its associated knitting
plant in Lumberton, N.C.

"While we saw that the Altamira operation had long-term growth
potential, we needed to reassess our commitment there in light of
the current economic environment," Emrich said. These conditions
include the continued strength of the Mexican peso, which is
causing products from Altamira to be more expensive than
competing products; unfavorable trade legislation such as the
Caribbean Basin Initiative, and the continued capital investment
that would be required in Altamira for the near-term.

"All of us are saddened by the impact this will have on 180
employees in Mexico and 100 in North Carolina. They've all done
an outstanding job under very tough circumstances, and we had all
hoped we could make their efforts pay off," Emrich said.

The Altamira and Lumberton facilities will continue to operate
for a short period of time to fill orders, and the company will
work with its customers to identify alternative supply sources.
The company expects Cushman & Wakefield to assist in the
disposition of its state-of-the-art Altamira facility.

"We're very encouraged with the progress we've made during the
past month," Emrich said. "Through the dedication and hard work
of the Guilford team, our core operations are showing the kind of
strength we hoped to achieve during this reorganization."

Guilford Mills is an integrated designer and producer of value-
added fabrics using a broad range of technologies. The company is
one of the largest warp knitters in the world and is a leader in
technological advances in textiles, including microdenier warp
knits and wide width circular knits of cotton blended with
LYCRA(R). Guilford Mills serves a diversified customer base in
the automotive, apparel and industrial markets.

CONTACT:  GUILFORD MILLS, INC.
          John A. Emrich, Chief Executive Officer
          Tel. +1-336-316-4000


HYLSAMEX: Receives Majority of Notes; Tender Offer Extended
-----------------------------------------------------------
Hylsamex, S.A. de C.V. and its subsidiary Hylsa, S.A. de C.V.
(the "Company" or "Hylsa") announced Monday that Hylsa has
received tenders of approximately $153 million in principal
amount of its 9 1/4% Notes due 2007 (the "2007 Notes") in
exchange for new 10 1/2% Notes due 2010.

Hylsa has now satisfied the condition that it receive tenders of
at least 50% in principal amount of its outstanding 2007 Notes
and the consent of a majority in principal amount of its
outstanding 2007 Notes to the proposed amendments to the
indenture governing the 2007 Notes and the waiver of past
defaults under the indenture.

Although these conditions are satisfied, to continue to encourage
holders to tender 2007 Notes for exchange, Hylsa is extending the
expiration date for the exchange offer until 11:59 p.m., New York
time, on May 16, 2002 (the "Expiration Date") and is extending
the period during which holders may receive the consent and
exchange payment until 5:00 p.m., New York time, on April 30,
2002.

Each holder that tenders 2007 Notes at or prior to 5:00 p.m., New
York time, on April 30, 2002 will receive a $10 consent and
exchange payment for each $1,000 principal amount of 2007 Notes
tendered and not withdrawn. Holders that previously consented to
the proposed amendments and waiver, but did not tender their 2007
Notes, may tender their 2007 Notes at or prior to 5:00 p.m., New
York time, on April 30, 2002 and receive the full $10 consent and
exchange payment for each $1,000 principal amount of 2007 Notes
tendered and not withdrawn (rather than the $5 consent payment).
All other terms and conditions to the exchange offer and consent
solicitation remain unchanged.

2007 Notes tendered and consents delivered at or prior to 11:59
p.m., New York time, on April 19, 2002 may not be withdrawn or
revoked.

The exchange offer continues to be subject to the consummation by
Hylsa of an overall restructuring of its outstanding debt, as
well as other customary conditions.

The new notes offered in the exchange offer will not be
registered under the Securities Act of 1933, as amended, and will
only be offered in the United States to qualified institutional
buyers in a private transaction, and outside the United States in
offshore transactions.

For further information (including requests for offer
documentation by eligible offerees), contact the information
agent for the Company:


CONTACT: MacKenzie Partners, Inc.
    Steven Balet
    E-mail: proxy@mackenziepartners.com
    Phone: 800-322-2885
           212-929-5500 (collect)


MEXICANA: Continues to Update and Modernize Fleet
-------------------------------------------------
Mexicana Airlines, led by its CEO and chairman, Mr. Fernando
Flores, announced Monday during a press conference held at the
27th edition of Tianguis in Acapulco, that it will continue with
the plan of renewing its fleet through 2003. The initiative was
approved by its Board, addressing a strategy focused on cost
cutting, stimulating productivity and bottom line results. The
plan will consist of replacing the remaining 11 Boeing 727-200
equipment in its fleet with younger and more modern Airbus A319
and Airbus A320 aircraft. The new aircraft will be flown directly
from the Airbus manufacturing plant in Hamburg, Germany, and will
be customized to meet the specifications as required by Mexicana
to comply with its route network.

Mexicana's modern fleet is currently comprised the following
aircraft: 8 Boeing 757, 11 Boeing 727-200, 12 Fokker 100, 23
Airbus A320 and 4 Airbus A319, which amounts to 58 airplanes,
averaging at 10 years of age, which is considered to be a very
young fleet in its region. Once the renewal plan has been
completed, the forecasted average age of the fleet will then be
less than 8 years.

CONTACT:  MEXICANA AIRLINES
          Media contact in Mexico
          Adolfo Crespo, V.P. of Public Affairs,
          Tel. +5-55-448-3000, ext. 3296
          Email: adolfo.crespo@mexicana.com.mx

          Media contact in the U.S.A.
          Jennifer L. Jenks, Marketing Manager
          Tel. +1-210-491-9764
          Email: jennyjenks@mexicana.com


P&M: To Close Mexican Mining By Third Quarter This Year
-------------------------------------------------------
Due to increasing mining costs, geological conditions, and
financial problems, Pittsburg & Midway Coal Mining (P&M) will
shut its Ancho mine in Mexico in the third quarter of this year,
reports Primedia Inc.

According to P&M spokesperson Bob Johnson, the mine is fulfilling
all customer contracts before the shutdown.

Part of the York Canyon complex, Ancho produced 1.12 million tons
of coal in 2001 and is the only operating mine there.



===============
P A R A G U A Y
===============

CORPOSANA: Only 6 Firms Submit Background Documents to Qualify
--------------------------------------------------------------
Out of the 13 companies that purchased pre-qualification
guidelines for the privatization of water utility Corposana, only
6 delivered background documents to Paraguay's state reform
agency SNRE on Monday, says Business News Americas.

The companies are UK's Anglian and International Water, Spain's
Aguas del Bilbao, France's Proactiva Medio Ambiente (Vivendi-
FCC), Italy's Acea and a consortium made up of Corposana workers.

A list of qualified companies will be released April 25, instead
of April 12 as earlier reported. The offers remained tentatively
scheduled for opening June 27.

Chicago-based firm, Baker & McKenzie, is the sale's legal
adviser. Spanish banking group, Santander Central Hispano, is the
financial consultant. Spanish investment bank, Nmas1, is managing
the sale process.

CONTACTS:  CORPOSANA LEGAL ADVISER:
           Baker & McKenzie
           Latin America Regional Council
           c/o Eduardo de Cerqueira Leite - Chairman
           Av. Dr. Chucri Zaidan 920, 8th floor
           Market Place Tower I
           04583-904 Sao Paulo, SP, Brazil
           Tel: (55-11) 3048-6800
           Fax: (55-11) 5506-3455
           Email: info-latinamerica@bakernet.com
           Marketing Manager: Ellen Van-Waveren

           Baker & McKenzie Headquarters:
           1 Prudential Plaza, 130 E. Randolph Dr., Ste. 2500
           Chicago, IL 60601
           Phone: 312-861-8800
           Fax: 312-861-2899
           Bakerinfo.com

           FINANCIAL CONSULTANT:
           Banco Santander Central Hispano
           Plaza de Canalejas,1
           28014 Madrid, Spain
           Phone: +34-91-558-10-31
           Fax: +34-91-552-66-70

           CORPOSANA:
           Emilio Botn-Sanz, Chairman
           Angel Corc>stegui Guraya, First Vice-Chairman and CEO
           Jose, Luis del Valle, EVP Finance




               ***********


S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter Latin American is a daily newsletter
co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ,
and Beard Group, Inc., Washington, DC. John D. Resnick, Edem
Psamathe P. Alfeche and Ma. Cristina Canson, Editors.

Copyright 2002.  All rights reserved.  ISSN 1529-2746.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

The TCR Latin America subscription rate is $575 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are $25 each.  For subscription information,
contact Christopher Beard at 240/629-3300.


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