TCRLA_Public/020529.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, May 29, 2002, Vol. 3, Issue 105



ACINDAR S.A.: 1Q02 Results Show Negative Devaluation Effects
BHN: S&P Rates MBS Default Over Peso Devaluation Concerns


BAHAMASAIR: Struggles To Keep Flying


BCP: Running Out Of Time To Pay Debts
EMBRAER: Wins $20-Mln Order For "Legacy" Jet From Spanish Firm
EMBRATEL: CADE Denies Injunction Request
VICUNHA TEXTIL: Places $40M Syndicated Loan To Help Slash Debts


EMELEC: Government Ditches Sale After Buyers Balk At Process


CHIQUITA BRANDS: Faces Strike Lodged By Honduran Workers
CHIQUITA BRANDS: 1Q02 Results Positive After Restructuring
CHIQUITA BRANDS: Director Carl H. Lindner Retires


AHMSA: To Present New Restructuring Plan June 30
FAR-BEN: Fund Administrator Takes Majority Control
KENWOOD CORP.: To Exit Mexican Plant As Part of Restructuring
NII HOLDINGS: DBRS Weighs In On Company's Forecast


BANCO UNION/ORIENTAL: Settlement To Return Funds to CB


URUGUAYAN BANKS: President Slams Rumors Of Imminent Restrictions


PDVSA: Stock Sale Not An Option To Remedy Financial Woes

     - - - - - - - - - -


ACINDAR S.A.: 1Q02 Results Show Negative Devaluation Effects
Acindar S.A. announced Monday its earnings for the first quarter
of Year 2002.  On January 6, 2002 Congress enacted Law 25.561
proposed by President Duhalde, which determined the end of the
Argentine Monetary Regime in force up to that date, the
Convertibility Law.  Results for the period were significantly
affected by the modification and the subsequent devaluation of
the Argentine Peso of more than 200%.  The Company repored a net
loss of P. 383.7 million for the quarter ended March 31, 2002
mainly as a result of Negative Financial and Holding Results of
ARS392.2 million.  The Financial and Holding Results primarily
reflect the exchange losses arising from the devaluation of the
Argentine Peso which occurred during the quarter.  Consequently
shareholder equity became negative amounting to ARS252.3 million.


- Revenues were ARS113.8 million during the quarter January -
March of 2002, 3.1% lower than revenues for the same period of
the previous Year.

- EBITDA was ARS22.2 million for the period, in comparison with
EBITDA of ARS2.6 million for the same quarter of year 2001.

- Ordinary loss for the period was ARS383.7 million in comparison
with an ordinary loss of ARS41.6 million for the same period of
the previous year.

- The Company recorded a Negative Shareholders' Equity of
ARS252.299.097 millions for the period ended March 31, 2002.

Net Sales:

A continued political and economic instability was the framework
for the Company's operations during the first quarter of 2002.
Construction activity plummeted 41%, comparing the first quarters
of Year 2002 and Year 2001, severely affecting domestic demand
and consequently the Company's sales to the local market.  Even
though, the devaluation of the argentine Peso had a positive
impact on the profitability of exports, it barely offset the
substantial drop in domestic sales.

Net sales decreased 3.1%, to ARS113.8 million for IQY02, as
compared with ARS117.5 million for the same period of Y01.

Domestic shipments posted a decrease of 44.6% in comparison with
the same period of year 2001, which were partially
counterbalanced by an increase of 11.6% in local prices.  During
the quarter the Company was able to increase domestic prices to
partially compensate higher production costs.  Despite higher
prices, the fall in domestic shipments was so pronounced that
domestic net sales of ARS57.1 million for the period ended March
31, 2002, showed a decrease of 38.1% when compared with ARS92.3
million for the first quarter of Year 2001 ("IQY01").  At the
same time, domestic net sales for 1QY02 were almost the same than
the previous quarter.  The combined effect of a 12.7% decline in
domestic shipments and a 12.8% increase in domestic prices
resulted in a slight decrease of 1.4% in domestic net sales, when
comparing 1QY02 vs. 4QY01.

Export sales increased from ARS25.2 million in 1QYO1 to ARS56.7
million in 1QY02.  While export volume rose 10.4%, reaching 75.2
thousand in tons in 1QY02, external prices in dollar terms
decreased 5.2%.  However, this decline was more than offset by
the effect of the devaluation of the argentine peso on the
revenues from external sales, resulting in an increase in export
net sales of 125%.  In comparison with the quarter ended December
2001, export shipments showed a growth of 0.4%, while net sales
soared by 155.4% as a consequence of the combined effect of
higher prices in dollar terms and the positive impact of the
devaluation of the argentine peso on the revenues from external

Operating Income

Operating results for the period ended March 31, 2002 continued
to be influenced by the deep recession affecting the Argentine
market.  However, a better profitability of exports has allowed
the Company to recover partially its operating margins.

While the Company raised domestic prices to compensate higher
production costs, exports revenues received the benefit of the
devaluation (excluding the impact of a new tax on exports created
by the national government).

The Company production costs per ton increased by 17.1% respect
to the previous quarter as a consequence of the impact of the
devaluation on its imported raw materials and to a lesser extent
by raises in the price of certain local inputs.  Notwithstanding,
further increases in the exchange rate at the end of the quarter,
set that replacement of raw material and other inputs was more
expensive than at the beginning of the period.  Because this
reason the Company estimates that the production cost will
further increase during the second quarter.

Gross profits for 1QY01 amounted to Ps 37.7 million, compared
with ARS18.1 million for the same period of Y01 and ARS9.6
million in comparison with the previous quarter.

Administrative and selling expenses decreased from ARS9.5 million
for 1QY01 to ARS8.2 million for the same period of Y02.  This
decrease was attributable to the reduction in expenses achieved
during the period as part of the cost cutting program launched by
the Company.  With respect to the previous quarter,
administrative and selling expenses remained almost stable.

Other costs include taxes (other than income and gross income
taxes) and allowances for doubtful accounts receivables.  Other
costs increased from ARS6.0 million for 1QY01 to ARS7.3 million
for the same period in Y01.

The Company hired an external consultant to conduct an evaluation
of the useful life of the main productive areas of Villa
Constitucion.  Based on such study, the Company decided to extend
the useful life of some equipment.  As a consequence,
depreciation expenses decreased by 12.5%, from ARS12.9 million
for 1QY01, to ARS11.3 million for the period ended March 2002.

The Comision Nacional de Valores ("CNV") issued Regulation Nbr.
398/02, which allows companies to capitalize the portion of the
exchange losses which was related to fixed assets financing.  The
Company capitalized an amount equivalent to ARS318.5 million and
the corresponding depreciation for the period amounts to ARS5.5

Operating loss for the period ended March 31, 2002 (1QY02) was
px. 383.7 million in comparison with an operating loss of Px.
41.6 million for the period ended March 31, 2001.

As a consequence of this performance EBITDA for the 1QY02 was
ARS22.2 million, in comparison with ARS2.6 million for 1QY01 and
a neutral result for the previous quarter.

The company recorded Results for long-term investment amounting
to ARS3.1 million for the 1QY02 and a neutral result for the
1QY01.  The increase was consequence of the net profits of IPH
S.A.I.C.F and Bonelli S.A., in which the Company has a 33% and
49% interest respectively.

Financial income (expenses) and holding gains (losses)
represented a net loss of ARS392.2 million, compared to a net
loss of ARS17.4 million in the same period of 2001.  Foreign
exchange losses were ARS706.8 million, ARS318.5 million of which
was related to capital expenditure financing and as such was
capitalized in fixed assets according to accounting standards and
CNV Resolution # 398/02 (the Argentine securities and exchange
commission); as a result of this the net exchange result was a
loss of ARS388.3 million.  Inventory results were a gain of
ARS22.5 million.

Balance Sheet and Cash Flow Statement

As of March 31, 2002, the Company's shareholders' equity amounted
to ARS231.1 million, while as a consequence of the reported loss,
the Company reported a negative shareholder's equity of ARS252.3

The Company's net financial position (current and non-current
banking debts less financial investments, net) amounted to
ARS1073.4 million and ARS370.3 million at March 31, 2001 and
2002, respectively.

At the end of March 2002 the Company had a cash position
amounting to ARS30.4 million.

On December 19, 2001 the Company announced the suspension of
principal and interest payments of its financial debt.  This
decision was a consequence of the deterioration of Argentina's
economic and financial situation, which significantly affected
Acindar's capacity to generate funds.

With the assistance of Credit Suisse First Boston, the company is
preparing a proposal that takes into account the best possible
options to meet its financial obligations, with the specific goal
of preserving work sources and the operational value of the

On April 30, 2002, the Ordinary and Extraordinary Shareholders
Meeting approved the obligatory reduction in capital from
ARS278.804.518 to ARS139.402.259 as a consequence of accumulated
losses, implying a capital reduction of 50% based on Financial
Statements as of December 2001.

           Jose I. Giraudo, Investor Relations Manager
           Phone: (54 11) 4719 8674

           Andrea Dala
           Investor Relations Officer
           Phone: (54 11) 4719 8672

Sociedad Estatal de Participaciones Industriales announced in a
statement that it has met all its financial commitments to its
former unit Aerolineas Argentinas, reports AFX.

According to the acquisition agreement signed in October with Air
Comet, a consortium of Spanish tour operator Viajes Marsans,
Spanair and Air Plus, SEPI was to pay US$548 million in various
stages. In the first stage, US$300 million was earmarked to write
off part of Aerolineas' debts.

Aerolineas chairman Antonio Mata is hopeful that the Company will
be able to reach an agreement with creditors in September that
will enable the airline to end its period under administration.

Mata expects Aerolineas to turn a profit within eight to 10
months and to reach breakeven or post only a small loss over the
whole of 2002.

Aerolineas's four-month loss narrowed to US$39 million from US$87
million in the year-earlier period, Mata said, adding that the
airline reduced operating costs by 75 percent to offset falling
revenue from a four-year economic slump.

According to Mata, Air Comet plans to carry out a US$50-million
capital increase by September unless it finds an outside investor
willing to inject money into the Company. The owners want to sell
Aerolineas shares in the stock market "once Aerolineas finances
are shored up."

          Torre Bouchard 547, 1106 Buenos Aires, ARGENTINA
          Phone: (54-11) 4310-3000
          Fax: (54-11) 4310-3585
          Home Page:
          Patricio Zabalia Lagos, President

          AIR COMET
          Bah­a de Pollensa, 21-23
          Edificio Airplus
          28042 Madrid
          Phone: 913 993 674
          Fax:  913 291 146
          Antonio Mata, presidente de Air Comet

BHN: S&P Rates MBS Default Over Peso Devaluation Concerns
Investors in Argentine ABS continue to feel the impact of recent
actions by the Argentine government.

The first setback came in February when the government pesified
Argentine dollar-denominated debts and loans at a rate of one
peso to one U.S. dollar. Shortly after pesification, the price of
the dollar doubled (the parity reached 2.15), cutting in half the
purchasing power of bond issuers' cash flows. This meant that the
amount owed to investors was mandatorily reduced so that the
original terms of investors' debt securities were now negatively
altered. As a result, "loan payments made by borrowers became
insufficient to cover the originally dollar-denominated payments
owed to investors," said Juan Pablo De Mollein, an Associate
Director in Standard & Poor's Buenos Aires office.

On May 6, 2002, investors experienced another upset when the
government abandoned the indexation of certain mortgage, auto,
and consumer loan payments to inflation. Instead, loan payments
are now indexed to variations in wages. Although the new
legislation provides some upward adjustment for pesified debts
and loans, it also brings increased uncertainty to debtors,
investors, and financial trusts. The indexation period will not
begin until October 1, thus extending the adjustment grace period
of the previous indexation system by two months. The new wage
index has not yet been created and it is unclear how it will be
periodically adjusted. Additionally, the wage indexing system
could yield significantly lower payment increases than an
inflation-based mechanism, especially in the recessive and
deteriorating environment that Argentina is experiencing.

Standard & Poor's rates two MBS that were issued by BHN and sold
in the international markets. They are BHN II and III Mortgage
Trust mortgage bonds. The securities are rated 'D', mainly due to
the effects of pesification. While payments continue to be made
to investors, they are not in amounts sufficient to meet the
original debt terms. Standard & Poor's also rates 15 ABS that
were sold in the domestic market, for a total issue amount of
more than $350 million. The deals are backed by consumer loans,
auto loans, and credit card vouchers. Five of these deals are
currently rated 'raD' on the national rating scale for Argentina,
due to pesification. The ratings on the remaining 10, which have
always been denominated in Argentine pesos, range from 'raBBB+'
to 'raC', due to the deteriorating performance of the underlying
assets of the transactions.

Additional changes to regulations and legislation could further
affect the asset-backed financings in Argentina, either by
aggravating the already unfavorable environment for financial
activities or by increasing uncertainty about the survival
prospects of those financial institutions, like servicers, that
play key roles in structured finance transactions.

          Juan Pablo De Mollein,  (54) 114-891-2113
          Felicitas Del Cioppo, (54) 114-891-2120
          Standard & Poor's, New York
          Diane Audino, 212/438-2388


BAHAMASAIR: Struggles To Keep Flying
Bahamasair, established almost 30 years ago as a monument to
national pride and a symbol of nationhood and independence, is
having a hard time keeping its planes in the air, according to a
Caribbean AirNews report.

Charles Beneby, a pilot and chief operating officer at
Bahamasair, suggested that the "serious cash shortage" makes it
difficult to do "normal things," such as making sure customers
are getting the service they have paid for; paying vendors,
maintenance, and keeping daily operations going.

Bahamasair is said to have one of the best management teams in
its checkered history. The Company's pilots' reputation is
regarded as legendary; and its 750 employees can hold their own
with their peers around the world.

However, Beneby suggested that it takes more than that to operate
an airline. According to the COO, the airline industry is capital
intensive. It takes millions of dollars each month to run an

"It takes a lot of money to run an airline and the amount of
money you have available determines the speed with which you can
get things done," said Beneby.

"No matter how good your people are if they do not have the
tools, they simply cannot get the job done."

In the case of Bahamasair, its aging fleet exacerbates the
problem. Beneby said that the age of the fleet means more time
and money are spent on maintenance and on parts.

"And this means more delays and loss of revenue," explained

The seemingly endless spiral of delays, leading to lost revenue
and mounting costs cannot go on forever.

The 27-year veteran explained that the mounting losses and the
attendant operational difficulties are taking their toll on the
people who are doing their best.

"Morale is low," he said, "because the staff are doing their best
but it makes no difference."

Several times each year, the minister responsible for the airline
gets up in Parliament and moves for the government to provide
another $20 million for the national airline, for its continued

Clearly, the Bahamian taxpayer cannot be expected to fund an
entity that is unable to function effectively. And at an
estimated US$30 million a month or over US$350 million each year,
the airline's continued existence cannot be justified.

Beneby urged that Bahamasair must end its reliance on public

"Overall, the staff want to do a good job, but they are concerned
about the future of their jobs.

Benebey revealed that proposals have been made to the government
in an attempt to help the airline resolve its problems. These
included upgrading the fleet, expanded routes and enhanced

"We have never had any real response to any of our proposals.
There seems not to be the will or desire on the part of the
government to do what is necessary."

          Po Box N-4881
          Nassau , Bahamas
          Tel: 809 327-8451 thru 9
          Fax: 809 327 7408
          Home Page:


BCP: Running Out Of Time To Pay Debts
Brazilian wireless carrier BCP, the money-losing subsidiary of
BellSouth Corporation, early this week received legal notice of a
72-hour period in which to pay its debt to a group of banks,
reports Jornal do Brasil.

Failure to make the payment within the term will lead the Company
to default, giving creditors a priority to access BCP's
receivables. Representatives of the banks are set to meet with
the executives of BellSouth to create a new proposal to pay off
the debt. Previously, the banks shunned a payment plan drawn up
by BellSouth.

BCP currently has debts totaling BRL4.411 billion, which far
exceed the assets of the Company.

BellSouth had a loss of US$383 million in its first quarter
figures, due to the problems with its investments in Brazil, and
has announced that it will not make any new investments in Latin

BCP managed to increase its EBITDA by 18 percent last year, to
BRL546 million and the day-to-day operations of the company are
continuing as usual, despite the crisis it is facing.

          Rua Florida, 1970
          Sao Paulo, SP, Brasil
          CEP 04565-001
          Tel. 55-11-5509-6555
          Fax 55-11-5509-6257
          Home Page:

          1155 Peachtree St. NE
          Atlanta, GA 30309-3610
          Phone: 404-249-2000
          Fax: 404-249-5599
          Home Page:
          Investor Relations
          Phone (US): 800.241.3419
          Fax: 404.249.2060

           100 Federal St.
           Boston, MA 02110
           Phone: 617-434-2200
           Fax: 617-434-6943
           Home Page:
           Investor Relations
           Phone: 617-434-2200

           Terrence Murray, Chairman
           Charles K. (Chad) Gifford, President/CEO/Director
           Eugene M. McQuade, Vice Chairman and CFO

           Avenida Paulista, 1111
           13th floor - room 5
           Sao Paulo 01311- 920
           Home Page:
           Fernando Tafner
           Phone: 55-11-5576-2004

           ABN AMRO HOLDING N.V.
           Foppingadreef 22
           1102 BS Amsterdam, The Netherlands
           Phone: +31-20-628-9393
           Fax: +31-20-629-9111
           Home Page:
           Investor Relations(HQ1191)
           Gustav Mahlerlaan 10
           PO Box 283
           1000 EA Amsterdam
           The Netherlands
           Tel. +31 (0) 20 628 78 35
           Phone:  +31 (0) 20 628 78 37

EMBRAER: Wins $20-Mln Order For "Legacy" Jet From Spanish Firm
Struggling to cope with the aftermath of the September 11
terrorist attacks in the U.S., Brazil's Empresa Brasileira de
Aeronautica SA received an order worth about $20 million for a
single corporate jet.

In a Bloomberg report, the fourth-largest maker of commercial
jets, revealed it got the order for the "Legacy" corporate jet
from Fadesa SA, a Spanish real estate development company.

Rodrigo Pereira, an analyst at Banco Pactual SA in Rio de
Janeiro, suggested that the latest transaction indicates how hard
it is for Embraer to win new business after the slump in airline
travel following the terrorist attacks in New York. The Company
doesn't announce all orders of corporate jets but said last month
that it didn't sell a single aircraft during the first quarter.

"It's really tough out there for Embraer," said Pereira, who
rates Embraer "Top Pick."

Embraer announced its last big order in December when it said it
won orders for its Legacy jet worth $1.1 billion when Indigo
Aviation, a unit of Chicago-based NewWorldAir Holdings Inc.,
placed 25 firm orders for the corporate shuttle version of its
Legacy jet and took out options for another 50.

Embraer has said it expects to deliver 18 Legacy jets this year
and 24 a year from 2003 to bring sales up to about 240 over 10
years. Embraer now has firm orders for 74 Legacy jets and options
for 94 more.

The Brazilian aircraft manufacturer has seen its earnings suffer
from the effects of September 11, with first quarter net income
down by 19 percent to BRL176.4 million (US$70 million), or 25
centavos a share, from BRL218.7 million, or 40 centavos, in the
same period a year earlier.

Accounts receivable continued to increase, a sign that the
Company still is struggling to turn orders into income. Accounts
receivable in the first quarter jumped to BRL1.77 billion from
BRL1.56 billion at the end of the fourth quarter. Since
September, Embraer has been assisting some clients to finance
aircraft orders.

Net revenue during the first quarter also fell 13 percent to
BRL1.33 billion from BRL1.52 billion in the same period a year
earlier, the Company revealed.

However, Embraer saw an improvement in its net cash at the end of
the first quarter. At March 31, net cash position was at BRL89.4
million, compared with negative BRL52.9 million at December 31.

Nonetheless, earnings before interest, taxes, depreciation and
amortization, (EBITDA) -- a measure of Embraer's ability to
generate cash -- fell to BRL302 million from BRL465.3 million a
year earlier.

           Press office:
           Phone +55 12 3927 1311
           Fax + 55 12 3927 2411
           Press office mgr. Bob Sharp
           Press officer Wagner Gonzalez

EMBRATEL: CADE Denies Injunction Request
Brazilian phone operator Embratel, as well as Intelig, failed to
obtain CADE's (Conselho Administrativo de Defesa Economico)
approval of a request to suspend the licenses granted to Telemar,
Telefonica and Brasil Telecom for the right to offer long
distance services.

Embratel and Intelig had requested for the injunction claiming
that as owners of local phone networks, the three firms have
lower interconnection rates than Embratel and Intelig, which have
to pay to use local networks of other companies.

CADE however denied the request stating that there is not
sufficient proof of Embratel and Intelig's allegations or any
urgency, which would justify such a measure.

CADE's ruling surprised Embratel and Intelig. However, the two
companies expressed optimism that CADE will continue to analyze
the issue.

Telemar will have to wait till the end of July to launch its Oi
cell phone service, while Anatel (Agencia Nacional de
Telecomunicacoes) verifies that the company has met service
requirement in several states and that it has modified its
previous policy of charging customers for phone installation even
before the installation took place.

Embratel was bought by embattled U.S.-based WorldCom Inc. through
its unit MCI for US$2.3 billion in the privatization of Brazil's
telecommunications system in 1997. The Company was once the jewel
of WorldCom's international properties. But, like other long-
distance carriers around the world, Embratel has suffered from a
decline in revenue as competitors gnawed at its once monopolistic
domination of the market. Embratel posted a US$16-million loss,
or 5 cents a share, in the first quarter of the year, an 8-
percent increase compared to BRL33.7 million in the year-ago

To see Embratel's latest financial statements:

          Investor Relations
          Silvia Pereira
          Tel. (55 21) 2519-9662
          Fax: (55 21) 2519-6388
          Press Relations:
          Helena Duncan/Mariana Palmeira
          Tel: (55 21) 2519-3653/3654
          Fax: (55 21) 2519-8010

VICUNHA TEXTIL: Places $40M Syndicated Loan To Help Slash Debts
Vicunha Textil SA, based in Fortaleza in Brazil's northeast,
received a three-year BRL100-million (US$40 million) syndicated
loan to refinance debt maturing this year, reports Bloomberg,
citing an article released by the Gazeta Mercantil newspaper.

The paper revealed that the loan, which was managed by Uniao de
Bancos Brasileiros SA, will help the Company extend the maturity
of its debt. About 85 percent of Vicunha's debt matures within a

Already, Vicunha Textil SA, the textile arm of Brazil's Vincunha
Group, has shut down six plants and sacked 3,000 employees to
reduce its debt of BRL400 million, the paper revealed, citing
Rubens Barhum, Vicunha's chief financial officer

Vicunha Textil is controlled by Benjamin Steinbruch, one of the
main shareholders of steelmaker Cia. Siderurgica Nacional (CSN).

          Rua Avail 207 Tatuape Cep 03080-900 Sao Paulo - Brasil
          Phone: (5511)694 10 731
          Fax: (5511)619 37 028
          Pagina Web:

          Av. Eusebio Matoso 891, 15th Floor
          Sao Paulo 05423, Brazil
          Phone: +55-11-3097-1313
          Fax: +55-11-3813-6182
          Home Page:
          Geraldo Travaglia, CFO and Executive Director
          Julia Reid, Investor Relations Associate Director


EMELEC: Government Ditches Sale After Buyers Balk At Process
Ecuador abandoned plans to sell the infrastructure and concession
to distribute power to Guayaquil previously owned by Empresa
Electrica del Ecuador (Emelec), reports Bloomberg.

The move came after all potential buyers, including Argentina's
Pecom Energia SA, a unit of Perez Companc SA, Spain's Union
Electrica Fenosa SA, and AES Corp., the biggest U.S. power plant
developer, pulled out from the process.

"Apparently the base price of $130 million was very high," said
Jorge Trujillo, the head of Ecuador's national electricity
council. "We are now analyzing re-opening the sale."

In March 2001, Ecuadorian electricity council Conelec canceled
Emelec's concession to distribute electricity in Guayaquil after
the Company broke its contract with the state, having accumulated
US$97 million in debts and failing to maintain service standards.
Emelec owner, Fernando Aspiazu was arrested, and the then-
government decided to sell the Company to reimburse clients of
Banco del Progreso, also owned by Aspiazu, and which was declared

CONTACT:  Electrica del Ecuador (EMELEC)
          Tel,fonos: (593-4) 248000 - 248003
          Fax: (593-4) 248051


CHIQUITA BRANDS: Faces Strike Lodged By Honduran Workers
Chiquita Brands International Inc., which emerged from Chapter 11
bankruptcy in March, recently had 2,000 of its workers at 10
company plantations along Honduras' Atlantic coast go on strike.

Workers are pressuring the Company to provide housing, health
care and schools for their families, increase salaries by 10
percent, and rehire workers who were recently laid off.

"The strike will go on until the Company agrees to our demands,"
said Oscar Amaya, president of the workers' union.

Most of the striking employees work at the banana exporter's
fruit-packing plant and plantations in the Cortes and Yoro
provinces. About 70 percent of them are women.

Chiquita workers have gone on strike more than 40 times during
the 89 years the Company has operated in Honduras. The biggest
strike was in 1954, when more than 30,000 employees stopped

Chiquita is trying to make a fresh start, changing its top
management, issuing new stock and securities and adopting a new
accounting standard.

CHIQUITA BRANDS: 1Q02 Results Positive After Restructuring
In a recent filing, Chiquita Brands reported its financial
results for the first quarter.


Net sales for the first quarter of 2002 increased $52 million to
$630 million primarily due to higher banana volume in Europe and
higher local prices in Central Europe compared to the prior year.

Operating income for the first quarter of 2002 was $42 million
compared to 2001 first quarter operating income of $38 million.
Most of the improvement in first quarter results occurred in the
Company's Fresh Produce business, primarily as a result of banana
volume growth in core European markets, higher local banana
pricing on volume growth in Central European markets, and lower
import license costs because of the April 2001 resolution of the
U.S. - European Union trade dispute. The Company grew volume by
about 2 million boxes in Central European markets, where market
pricing was strong. In core European markets, the Company grew
banana volume about 10% year-on-year and benefited from
approximately $6 million in lower import license costs.
Additionally, in the Asia Pacific region, where the Company has a
relatively smaller presence, higher local banana prices drove a
$6 million earnings improvement despite weakness in the yen.
These improvements were mostly offset by weaker European
currencies in relation to the U.S. dollar, lower pricing in North
America, and higher costs for the purchase and production of
bananas in the quarter. European currency weakness had a $9
million negative effect compared to the first quarter of 2001. In
North America, the Company increased banana volume by about 5%
but experienced 7% lower pricing versus the same period a year

Processed Foods operating income was $1 million versus a
breakeven result in the first quarter of 2001. Higher prices on
canned vegetables were offset by increased costs per can as a
result of a planned smaller harvest during the fall 2001.

The Company's interest expense of $9 million in the first quarter
of 2002 was $23 million lower than in 2001. $20 million of this
decrease was due to the elimination of interest expense on parent
company debt while CBII was in Chapter 11 proceedings during the
first quarter of 2002.

The Company's effective tax rate is affected by the level and mix
of income among various domestic and foreign jurisdictions in
which the Company operates. For the first quarter of 2002, income
tax expense includes a benefit for a 2002 tax law that changed
the calculation of the Company's 2001 U.S. alternative minimum
tax liability.

Financial Condition -

Parent Company Debt Restructuring

On March 19, 2002, CBII, a parent holding company without
business operations of its own, completed its previously
announced financial restructuring when its pre-arranged Plan of
Reorganization under Chapter 11 of the U.S. Bankruptcy Code
became effective. The events, which occurred during 2001 and the
first quarter of 2002 relating to the Chapter 11 proceedings, the
securities issued in accordance with the Plan, and the fresh
start accounting adjustments are described in "Parent Company
Debt Restructuring" and "Fresh Start Adjustments" in the Notes to
Consolidated Financial Statements. The Plan will reduce
Chiquita's future annual interest expense by approximately $60
million. In addition, due to the fresh start adjustments to
property, plant and equipment, annual depreciation expense will
decrease by approximately $40 million.

Other Liquidity and Capital Resources Information

The Company believes that the reduction of interest expense
provided by its financial restructuring, the cash flow generated
by operating subsidiaries, and available borrowings under its
working capital facilities provide sufficient cash reserves and
liquidity to fund the Company's working capital needs, capital
expenditures and debt service requirements, including CBII's New

In March 2001, the Company's operating subsidiary, CBI, obtained
a three-year secured bank credit facility for up to $120 million
to replace CBII's expiring bank revolving credit agreement. This
facility consisted of a term loan of $75 million and a revolving
credit facility of $45 million. A portion of the proceeds of the
term loan was used to repay $50 million of bank loans of certain
Costa Rican farm subsidiaries. Interest on amounts outstanding
under the facility was based on the bank corporate base rate plus
5%, subject to a minimum of 14% per annum. An annual facility fee
of 2% of the total credit facility was also payable.

In March 2002, this CBI facility was increased to $130 million,
comprised of a $70 million term loan and a revolving credit
facility of $60 million. Interest on borrowings on this amended
facility is based on the prevailing LIBOR rates plus 3.75% or the
bank corporate base rate plus 1% (at CBI's option), subject to a
minimum annual rate of 6%. The annual facility fee has been
eliminated, and the Company paid an amendment fee of 5% of the
total credit facility. Substantially all U.S. assets of CBI
(except for those of subsidiaries, such as Chiquita Processed
Foods, L.L.C. ("CPF"), with their own credit facilities) are
pledged to secure the CBI credit facility. The CBI credit
facility is also secured by liens on CBI's trademarks and pledges
of stock and guarantees by various subsidiaries worldwide. The
facility contains covenants that limit the distribution of cash
from CBI to CBII, the parent holding company, to amounts
necessary to pay interest on the New Notes (provided CBI meets
certain liquidity tests), income taxes and permitted CBII
overhead. The facility also has covenants that require CBI to
maintain certain financial ratios related to debt coverage and
income, and that limit capital expenditures and investments. At
April 30, 2002, $70 million of the term loan was outstanding, $35
million of borrowings were outstanding under the revolving credit
facility and $4 million of the availability under the revolving
credit facility had also been used to issue letters of credit.
Availability under the CBI facility at April 30, 2002 was $11

At April 30, 2002, approximately $75 million of additional
borrowings were available to CPF for working capital purposes
under its committed line of credit.

          James B. Riley, Senior Vice-President/CFO
          Tel. +1-513-784-6307
          William T. Sandstrom, Director of Investor Relations
          Tel. +1-513-784-6366

CHIQUITA BRANDS: Director Carl H. Lindner Retires
Chiquita Brands International, Inc. announced May 22, 2002 the
decision of former board chairman Carl H. Lindner to retire as a
member of the company's board of directors.

In a letter to Chiquita's current board chairman and CEO Cyrus
Freidheim, Mr. Lindner expressed a desire at this time in his
life to limit his commitments and devote his full time and energy
to the affairs of American Financial Group, Inc., a diversified
insurance company led by Mr. Lindner and his sons. Mr. Lindner
further said: "I wish you and all of the employees of Chiquita
the best as you lead the company into a future full of
opportunities for success."

"Carl Lindner's leadership has guided the development of Chiquita
over the last 18 years," said Mr. Freidheim. "His tireless
efforts have helped Chiquita regain a strong position in the
European market and the banana industry globally. Although Carl
will be leaving our board, I am pleased that he has offered us
the continued benefit of his valued advice and counsel."

Chiquita is a leading international marketer, producer and
distributor of quality fresh fruits and vegetables and processed

SOURCE Chiquita Brands International, Inc.

          Magnes Welsh, Director of Public Relations
          Tel. +1-513-784-6325


AHMSA: To Present New Restructuring Plan June 30
A new restructuring plan for the beleaguered Mexican iron and
steel firm Altos Hornos de Mexico SA (AHMSA) involving some
US$1.85 billion in bank debts will be presented to creditors June
30, says a report by Business News Americas.

AHMSA, which ran into trouble following a drop in world steel
prices resulting from the 1998 Asian crisis, suspended debt
payments in 1999, and for three years has been in negotiations
with lenders regarding debt restructuring.

In April, a steering committee, which represents more than 100 of
AHMSA's creditor banks, unilaterally broke off the negotiations,
saying it would not return to the negotiating table until the
Company replaces the current board of directors, which is led by
Alonso Ancira.

The banks accuse the board of lacking the will to face up to
their obligations and to put the Company's finances in order.

Ronald Dickens, a spokesperson for the steering committee, said
that the committee has no meeting scheduled with AHMSA and that
the stand off in relations continues. He expects AHMSA to make a
general announcement, rather than to hold a face-to-face meeting
with the banks.

           Prolongacion B. Juarez s/n,
           Monclova , Coahuila 25770
           Phone: +52 86 33 81 72
           Fax: +52 86 33 65 66
           Alonso Ancira Elizondo, CEO, Vice Chairman, Pres./CEO
           Jorge Ancira Elizondo, Chief Financial Officer
           Manuel Ancira Elizondo, Chief Operating Officer

                 Montes Urales 424,
                 Col. Lomas de Chapultepec
                 11000 Mexico, D.F., Mexico
                 Phone: +52-55-5201-2000
                 Fax: +52-55-5201-2313
                 Home Page:
                 Ricardo Guajardo Touche, Chairman
                 Vitalino M. Nafria Aznar, CEO

                 CITIGROUP INC.
                 399 Park Ave.
                 New York, NY 10043
                 Phone: 212-559-1000
                 Fax: 212-793-3946
                 Home Page:
                 Sanford I. (Sandy) Weill, Chairman and CEO
                 Todd S. Thomson, EVP-Finance and Investments/CFO

                 CITIGROUP IN MEXICO:
                 Avenida Paseo De La Reforma
                 No. 390, Col. Juarez
                 Mexico City 6695
                 Jose Ortiz-Izquierdo
                 Phone: 52-5225-5136

                 Zaragoza 920 Sur
                 64000 Monterrey, Mexico
                 Phone: +52-81-8831-9720
                 Fax: +52-81-8831-9727
                 Home Page:
                 Roberto Gonzalez Barrera, Chairman
                 Othon Ruiz Montemayor, Chief Executive Officer
                 Federico Valenzuela Ochoa, General Dir. Finances

FAR-BEN: Fund Administrator Takes Majority Control
Mexican fund administrator Promotora Mexicana de Capitales
(Promecap) was to conclude its acquisition of a majority stake in
Farmacias Benavides (FAR-BEN) last week at the latest, reports
Corporate Mexico. This week, the fund administrator is expected
to initiate negotiations with creditors that hold about US$90
million in Benavides' debt.

Promecap President Fernando Chico Pardo says the firm would
acquire 60 percent of the shares through a capitalization of
US$50-60 million.

Such a process will bring to an end one of the most traditional
family-owned companies in Monterrey, which could not reconcile
its growth strategy with the tough competition in the
pharmaceuticals market.

When the smoke clears, Chico Pardo will be the new chairman of
the board along with other administrative changes that are

          Benavides (Far-Ben S.A. De C.V.)
          602 Pino Suarez South Central
          Monterrey Nuevo Leon
          Phone: +52 50 77 00
          Fax: +52 89 99 31
          Home Page:
          Investor Relations
          Enrique Javier Villarreal Bacco, CFO
          Guillermo Benavides Arredondo, COO
          Miguel Carlos Peinado Gonz lez, Purchasing and
                                          Merchandising VP
          Fernando Benavides Sauceda, Chief Information Officer

KENWOOD CORP.: To Exit Mexican Plant As Part of Restructuring
Kenwood Corp. will be shutting down its plants in Mexico and
France, and will cut operations largely at its audiovisual plant
in Malaysia as part of a recently unveiled restructuring plan,
according to Kyodo News.

About 2,700 jobs, or 30 percent of its group workforce, will be
sacked under the plan, which will also see Hiroshi Nakano
resigning as president of the embattled audio equipment maker.
Nakano will be replaced by Haruo Kawahara, 63, an adviser at
Toshiba Corp., effective June 27.

Kawahara, who has been involved in reconstruction of music
entertainment firm Nippon Columbia Co., was asked by Kenwood's
main creditor bank, Asahi Bank, to assume the presidency.

In the year to March 31, the Company posted a group net loss of
JPY26.6 billion, with liabilities exceeding assets by JPY17

          2967-3, Ishikawa-cho, Hachioji,
          Tokyo 192-8525, Japan
          Phone : 0426-46-5111
          Fax : 0426-46-7960
          URL :

NII HOLDINGS: DBRS Weighs In On Company's Forecast
Nextel Communications, Inc. is the fifth largest wireless carrier
in the U.S. with over 9.1 million subscribers. Its subscriber
base (1) consists exclusively of business users that span 12
different industries, (2) generates the highest ARPU in the
industry, and (3) does not subscribe to a prepaid offering. Its
unique IDEN network offers the Company a competitive advantage
with the ability to offer multifunctional voice and data handset
services with its Direct Connect and Wireless Web services.
However, its competitors will begin to offer these services as
they roll out their 2.5G networks in the U.S. later this year.

The Company's international operations, through NII Holdings
("NII"), operate in Mexico, South America, and the Philippines.
NII has reached an agreement with its creditors regarding
restructuring its $2.67 billion in debt obligations, and has
subsequently filed for Chapter 11 bankruptcy protection. As a
result, DBRS has assumed that NII will be deconsolidated going

Over the next year, domestic EBITDA is expected to grow to $2.3
billion as subscriber growth outpaces further pressure to ARPU
from competition and increased operating costs as a result of
greater usage and network expansion. Churn is expected to trend
slightly higher above 2% as competition for gross subscriber
additions intensifies. Cash flow from operations is expected to
improve despite the increased cash interest expense burden as
more of its discount notes turn cash pay. Capex levels are
expected to be in the $2.5 billion - $2.8 billion range as the
Company focuses on expanding and upgrading its domestic
operations. As a result, its free cash flow deficit is expected
to improve to approximately $1.7 billion. Liquidity options
include cash of $3.8 billion and $1.5 billion undrawn on its $6
billion credit facility.

Nextel is not an obvious match with another carrier in the highly
anticipated consolidation of the U.S. wireless industry. The two
main obstacles to the Company being acquired are (1) its domestic
debt levels of $14.5 billion, and (2) its unique IDEN technology
and non-contiguous network. Over the medium term, the Company
could either lead with new technology initiatives or initiate a
roaming plan with dual-mode/dual-band handsets on one of the more
widely used platforms. Regardless of the method it chooses,
Nextel will need to be proactive if it is to maintain its
competitive advantage in the future. This will likely be costly
in the form of capital or opportunity costs.

Dominion Bond Rating Service Limited (DBRS) is a Toronto-based,
full-service credit rating agency established in 1976. Privately
owned and operated without affiliation to any organization, DBRS
is respected for its independent, third-party evaluations of
corporate and government issues, spanning North America, Europe
and Asia. DBRS's extensive coverage of securitizations and
structured finance transactions solidifies our standing as a
leading provider of comprehensive, in-depth credit analysis.

CONTACT:  416-593-5577 x2242/x2268
          Chris Diceman, CFA, Rory
          Buchalter, CFA,


BANCO UNION/ORIENTAL: Settlement To Return Funds to CB
The US$14-million amount that was stolen from two liquidated
banks may be recovered in two months' time as Paraguay's central
bank is planning to accept an out of court settlement in order to
avoid a protracted court battle in the US.

Some US$16 million was siphoned out of Banco Union and Banco
Oriental during their respective liquidation processes, of which
US$14 million was transferred to a Citibank account in New York.
The banks were intervened in 1997, but Paraguayan authorities
uncovered the wrongdoings only in April last year.

The main suspects in the US, John Tulac, a Los Angeles-based
economist and lawyer, and Jose Manuel Avila, have offered the
central bank an out of court-settlement that includes returning
the US$14 million and aiding the Paraguayan authorities to find
the remaining US$2 million, which supposedly is in Paraguay.

Meanwhile, in Paraguay, former banking regulator Carlos Pecci,
along with a former central bank board member and the liquidators
of Union and Oriental are under investigation for their
involvement in the scandal and supposed knowledge of the missing
US$2 million.

The scandal rocked Paraguay's financial elite as Pecci was fired
last year and former central bank chairman Washington Ashwel
resigned voluntarily.

          Sr. Ismael Aranda, Gerente General
          Casilla Postal 726
          Av. Mariscal Lopez 3333
          Asuncion, Paraguay
          Ph: 595/21/606450 - Fx: 595/21/606669


URUGUAYAN BANKS: President Slams Rumors Of Imminent Restrictions
President Jorge Batlle condemned a report by an Argentine
television station, which suggested that Uruguay will have
banking restrictions in place within the coming month, AFX

Characterizing the rumors as "lies designed to damage the
country's reputation," Batlle denied that Uruguay is planning to
impose restrictions on its banking system similar to those
adopted in neighboring Argentina.

Foreign currency deposits in the Uruguayan banking system
totalled US$11.077 billion at end-April, down 18.73 percent from
end-December. Over the same period, central bank dollar reserves
fell to US$1.569 billion from US$2.926 billion.


PDVSA: Stock Sale Not An Option To Remedy Financial Woes
State-owned Petroleos de Venezuela (PdVSA) will not resort to an
equity offering in order to remedy "transitory" liquidity
problems, EFE reports, citing PdVSA president, Ali Rodriguez.

Rodriguez made his comments in reaction to proposals coming from
various local analysts and economists to sell PdVSA stock to
create new liquid resources. The funds would be expected to pay
for Venezuelan foreign debt of some US$22 billion, or the
internal liabilities which, according to private calculations,
exceed US$8 billion.

"I don't believe that it's necessary to put PdVSA stock on the
market or sell shares of PdVSA to guarantee participation from
the private sector," Rodriguez said.

While Rodriguez admitted that PdVSA, one of the largest petroleum
companies in the world, has "transitory" cash flow problems, he
clarified that its current financial situation "is very far" from
what rumors say is a supposed "technical breakdown."

"It is difficult for a company that has ... 72 million barrels of
proven reserves, one whose share value far exceeds US$32 billion,
to be going bankrupt," said Rodriguez.

PdVSA "has a sufficient resource base to resolve any problems
that may arise, including improving significantly, without the
need to privatize," added the former president and former
secretary of the Organization of Petroleum Exporting Countries
(OPEC), of which Venezuela is a founding and principal member.

CONTACT:  Omar Guaregua
          Phone: (58212) 7084822

          Yoly Bravo
          Phone: (58212) 7084484


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
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Information contained herein is obtained from sources believed to
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