TCRLA_Public/020717.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, July 17, 2002, Vol. 3, Issue 140



TYCO INTERNATIONAL: Shares Up As Icahn Rumors Circulate


CSN: Metalic Acquisition Approved for BRL108.5 million
EMBRAER: Airplane Deliveries Shrink During 2Q02
EMBRATEL: Competition Threatens Survival
EMBRATEL: Awards Contract To Israeli Firm

NET SERVICOS: Debt Renegotiation Enables BRL1 B Capital Increase
TELEGLOBE: Creditors Sue Parent For US$1.19B


TELEFONICA CTC: Ongoing Strike Disrupts Service


CHIVOR SA: Court Grants Extension to Oct. 21 for Schedules
CHIVOR SA: Gets Authority to Hire Ordinary Course Professionals
CHIVOR SA: Plan Confirmation Hearing Set for August 13


AEROVOX: Sells Mexican Unit to NGM; Shareholders Wiped Out
GRUPO BITAL: Goes On The Block Amid Mounting Pressure
GUILFORD MILLS: Reorg Plan Keeps Mexican Operations Intact
NII HOLDINGS: Restructuring Plan Seeks To Slash Debts 80%


TELEFONICA DEL PERU: Fitch Reviews WorldCom Exposure, Watch Neg

     - - - - - - - - - -


TYCO INTERNATIONAL: Shares Up As Icahn Rumors Circulate
Shares of Tyco International Inc. rose Monday amid speculation
that financier Carl Icahn is in the running for the embattled
Bermuda-based conglomerate, the AP suggests. Tyco shares closed
up 75 cents, or 5.5%, at $14.48 on the New York Stock Exchange.

The buzz ignited on reports that Icahn has received clearance
from the Federal Trade Commission to buy up to 15% of Tyco's
shares. The action doesn't mean however that Icahn owns the
shares or plans to take a stake in Tyco.

Meanwhile, a recent research note from Merrill Lynch, which said
that Tyco's parts are worth significantly more than the current
market value, was also credited with possibly pushing the stock

CONTACT:  Tyco International Ltd.
          The Zurich Centre, Second Floor
          90 Pitts Bay Road
          Pembroke HM 08, Bermuda
          Phone: 441-292-8674

          Tyco International (U.S.) Inc.
          One Tyco Park
          Exeter, NH 03833
          Phone: 603-778-9700
          Home Page:


CSN: Metalic Acquisition Approved for BRL108.5 million
The board of directors of Brazil's Companhia Siderurgica Nacional
(CSN) approved Monday the Company's purchase of fellow Brazilian
firm soda can maker Metalic as part of its strategy to expand
markets for its products.

According to Dow Jones Newswires, the acquisition worth BRL108.5
million included CSN's assumption of Metalic's total financial
obligations of BRL107 million.

Metalic is Brazil's only beverage-can maker. It uses products
made exclusively by CSN in the country.

Meanwhile, CSN is currently in negotiations with English-Dutch
company Corus. The negotiations, according to market sources,
involve a share swap between the companies.

CSN would have 10% less than the 20% stake that Corus would have
in the Brazilian company and Corus would take over part of CSN
debt. Corus would also have access to CSN raw material and would
compete with the European group Arcelor, which owns Acesita in
Brazil and makes part of controller group of CST (Companhia
Siderurgica de Tubarao). CSN, which production reaches 5mil m
tons of steel per year, would penetrate Europe easier through the

However, state-owned national development bank BNDES, is unsure
whether to allow the Vincunha group swap its shares in CSN for
Corus shares. BNDES and other creditors lent US$600 million to
Vincunha group, which used its 46.5% stake in CSN as collateral.
According to a BNDES source, the bank and the other lenders want
to make sure they do not lose out in the exchange.

          Rua Lauro Muller 116-36 Andar, PO Box 2736
          Rio De Janeiro, Brazil, 22299-900
          Phone: 55 21 5451707
          Fax: 5521 5451529
          Home Page:
          Benjamin Steinbruch, CEO (interim basis)
          Antonio Mary Ulrich, Exec. Officer - Investors

EMBRAER: Airplane Deliveries Shrink During 2Q02
Brazil's Embraer, the world's No. 4 maker of civilian aircraft,
disclosed Monday that commercial and corporate deliveries
declined in the second quarter of the year.

In a report by Reuters, Embraer said it only delivered 30
commercial and corporate airplanes in the second quarter compared
to 44 jets in the same period a year ago. The deliveries,
however, fell in line with the first quarter of 2002 as shown in
Embraer's 2001 and first quarter earnings reports.

In a statement, Embraer said in the first six months of 2002 it
delivered a total of 60 airplanes from its ERJ 135, 140, and 145
commercial line, and its EMB 145 and Legacy corporate jets.
Embraer delivered 86 jets in the first six months of 2001.

The Company has said it will deliver a total of 135 planes in
2002, a forecast it had to cut from 205 after the Sept. 11
attacks on the United States cut into demand for air travel and
plunged the airline industry into a steep crisis.

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

For the second time this year, Moody's Investors Service
downgraded Brazil's Eletropaulo Metropolitana Eletricidade de Sao
Paulo SA's debt. Eletropaulo, a unit of AES Corp., had its local
currency issuer rating lowered to B1 from Ba2 by Moody's on
concern that it may not be able to refinance US$740 million in
debt. Moody's said it was keeping the utility under review for a
possible further downgrade on its local and foreign currency

"The rating action reflects Moody's concern about Eletropaulo's
financial flexibility and its significant need to execute near
term financing, during a period of significantly diminished
market access in Brazil," Moody's said.

Moody's believes that Eletropaulo, which has US$1.6 billion in
debt, does not have enough cash to pay off the US$740 million in
debt coming due through December. The Company may have trouble
rolling over debt as investors dump Brazilian securities on
concern opposition candidate Luiz Inacio Lula da Silva may win
the country's October presidential election.

The real has weakened 19% this year against the U.S. dollar and
the country's 8% benchmark bond maturing in 2014 has lost 24% of
its value in the past three months.

Moody's first downgraded Eletropaulo's ratings last month, when
it cut the Company's local currency ratings by one level.

Eletropaulo is the largest electric distribution company in
Brazil serving 42% of the state of Sao Paulo, with the highest
GDP per capital, population density and electricity consumption
per customer of any South American distribution company.

          Avenida Alfredo Egidio de Souza Aranha 100-B,
          13 andar 04726-270 San Paulo
          Phone: +55-11-548-9461, +55 11 5696 3595
          Fax: +55-11-546-1933
          Luiz D. Travesso, Chairman and President
          Orestes Gonzalves Jr., VP Finance/Investor Relations

          Daniel Gates, Managing Director - Corporate Finance
          JOURNALISTS: 212-553-0376
          SUBSCRIBERS: 212-553-1653

          Robert Johnson, VP - Senior Credit Officer
                          Corporate Finance
          JOURNALISTS: 212-553-0376
          SUBSCRIBERS: 212-553-1653

EMBRATEL: Competition Threatens Survival
The head of one of Embratel Participacoes SA's units predicted
Brazil's largest phone company won't survive six months once
other companies offer competing service.

Citing Folha de S. Paulo newspaper, Bloomberg reports that
Eduardo Levy, president of Embratel Empresas, Embratel's
corporate accounts unit, said that the Company won't last six
months because it can't offer competitive prices due to the high
connection rate it pays to use the network of other operators.

Telefonica's subscribers pay 15 centavos to call inside the Sao
Paulo state, Levy said, according to the newspaper. Embratel has
to pay 11 centavos to use Telefonica's network, Folha said.

Following Levy's announcement, Embratel's shares, which are the
worst performing at the Bovespa this year, fell another 16% to

"With more negative news about Embratel, investors prefer to sell
the shares," said Fabio Motta, who manages at BRL160 million
(US$56 million) in equities at Sul America Investimentos SA in
Sao Paulo.

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

EMBRATEL: Awards Contract To Israeli Firm
Embratel Participacoes SA, the Brazil's biggest long-distance
company controlled by WorldCom Inc., awarded a contract to Nice
Systems Ltd., an Israeli maker of digital-archiving equipment,
says Bloomberg.

The terms of the contract were not disclosed. But Nice revealed
in a statement to the Tel Aviv Stock Exchange that the contract
will see Rio de Janeiro-based Embratel using Nice's equipment to
let managers monitor calls to its customer-call centers.

WorldCom Inc., which was charged with fraud by the U.S.
Securities and Exchange Commission for hiding $3.9 billion of
costs, wants to sell Embratel as part of its effort to raise
money to avoid bankruptcy, analysts said.

NET SERVICOS: Debt Renegotiation Enables BRL1 B Capital Increase
Struggling Brazilian cable television provider Net Servicos de
Comunicacao SA, formerly known as Globo Cabo, has restructured
debts maturing in 2002 and 2003. According to company president
Luiz Antonio Viana, Net was able to reschedule payments on US$200
million in debts owed in 2002 and 2003.

Meanwhile, the Company also paid US$52 million in commercial
paper due Monday. The restructuring paves the way for a BRL1-
billion (R$ 2.86 = $1.00) expansion of capital, Viana said.

"With the debt restructuring, shareholders have approved the
expansion in capital, which will occur by the end of the month."
Viana said, adding that the Company's management was already
working on underwriting terms for the issue of new stock.

To see financial statements:

          Leonardo P. Gomes Pereira, Investor Relations & CFO
          CNPJ/MF n  00.108.786/0001-65
          NIRE n  35.300.177.240
          Companhia Aberta
          Rua Verbo Divino n  1.356 - 1 a., Sao Paulo-SP

TELEGLOBE: Creditors Sue Parent For US$1.19B
Canadian and international banks filed a suit Friday against BCE
Inc., Canada's biggest communications group, in the Ontario
Superior Court of Justice. According to Reuters, the US$1.19-
billion suit corresponds to the US$1.25-billion amount, which the
creditors advanced to BCE's insolvent former international
carrier, Teleglobe Inc.

Teleglobe lending syndicate includes Canada's biggest banks, such
as Bank of Montreal, Canadian Imperial Bank of Commerce, Toronto-
Dominion Bank, Royal Bank of Canada, Bank of Nova Scotia,
Laurentian Bank and National Bank of Canada.

Other lenders listed as creditors in the lawsuit include Citibank
NA, Credit Suisse First Boston Canada, Merrill Lynch Capital
(Canada) Inc., JPMorgan Chase Bank and Export Development Canada.

Denying any liability to the creditors, BCE said the "claims
contained in the lawsuit are without merit or foundation." BCE
added it intended to "vigorously defend" its position.

Teleglobe was forced to obtain bankruptcy protection in Canada
earlier this year and seek the same status in the United States
after BCE cut its funding ties to the Company. Including the
banking credit facility, Teleglobe had some US$2.7 billion of
debt outstanding.

Last Wednesday, SkyOnline, Inc., a telecommunications/value-added
services provider with headquarters in the United States, agreed
to acquire Teleglobe Inc.'s Data and Internet Operations in Latin
America. Teleglobe has operations in Argentina, Brazil, Chile,
Colombia, El Salvador, Mexico and Panama.

BCE bought Teleglobe in 2000 for CAD7.4 billion ($4.8 billion)
and poured another CAD1.3 billion into the Company in a failed
attempt to shore it up.


             Carlos Pellegrini 1163 Piso 4
             Buenos Aires, Argentina C1009ABW
             Telephone: 54.11.6310.0100
             Facsimile: 54.11.6310.0101

             Rua Matias Aires, 402 9* Andar
             Sao Paulo, S.P. Brazil 01309-020

             World Trade Center
             Ave. Nueva Tajamar 481
             Torre Sur - Ofic. 1002 - Las Condes
             Santiago, Chile
             Telephone: 562.350.4260

             Calle 114 N*9-45 torre B, Of. 1008
             Teleport Business Park
             Santa Fe de Bogota
             Telephone: 571.657.9000
             Facsimile: 571.629.2897

             EL SALVADOR
             91 Ave Norte #626
             Colonia Escalon
             San Salvador, El Salvador
             Telephone: 503.263.4836
             Facsimile: 503.263.2466

             12 Calle / 1-25 / Zona 10
             Edificio Geminis 10
             Torre Norte - Oficina 611
             Guatemala City, Guatemala 01010
             Telephone: 502.335.3217
             Facsimile: 502.335.3221

             Blvd. Manuel A. Camacho 36, 21st floor
             Torre Esmeralda II
             Col. Lomas de Chapultepec
             11000 M,xico, D.F.
             Telephone: 52.55.5095.5900
             Facsimile: 52.55.5095.5928

             Edif. Plaza Obarrio - Of. 302
             Av. Samuel Lewis
             Panama City
             Telephone: 507.265.1329
             Facsimile: 507.265.7913


199 Bay Street, Commerce Court West
Toronto, Ontario M5L 1A2, Canada
Phone: (416) 980-2211
Fax:   (416) 980-5028
       (416) 980-5026
Home Page:
     Corporate Secretary
     Phone: (416) 980-3096
     Fax:   (416) 980-7012

     Investor Relations
     Phone: (416) 980-6657
     Fax:   (416) 980-5028

     Corporate Communications and Public Affairs
     Phone: (416) 980-4523
     Fax:   (416) 363-5347

     Office of the Ombudsman
     Phone: 1 800 308-6859
     Fax:   1 800 308-6861
            (416) 861-3313 (Toronto)
            (416) 980-3754 (Toronto)

Toronto-Dominion Centre,,
King St. West and Bay St.
Toronto, Ontario M5K 1A2, Canada
Phone: 416-982-8222
Fax: 416-982-5671
Home Page:
Anderson, M. Norman N., Director
Baille, A. Charles, Chairman
Bell, Allen W., Executive Vice President

151 O'Connor
Ottawa, Canada
K1A 1K3
Phone: (613) 598-2500
Fax: (613) 237-2690
Home Page:
Investor Relations
Fax: 613) 563-8834

Alex Watson, Portfolio Manager
Phone: (613)598-2800

Nancy Kyte, Investor Relations Manager
Phone: (613)598-3522

One Technology Center
Tulsa, OK 74103
Phone: 918-547-6000
Fax: 918-547-7134
Home Page:
     Howard E. Janzen, Chairman, President and CEO
     Scott E. Schubert, EVP and CFO

     Investor Relations
     Phone: 1.866.468.6924

Home Page:

New York Branch
North & Latin American Region
560 Lexington Avenue
New York, NY 10022
Tel  (212)310-9800
Fax (212)310-9841

Toronto Branch
BCE Place / Suite 3210
181 Bay Street
Toronto, Ontario M5J2T3
Tel (416)862-8840
Fax (416)862-2381

Representative Office for Mexico
Edificio Forum
Adres Bello No.10 Piso 16
Chapultepec Morales
11560 Mexico, D.F
Tel (0052-5)282-9111/14
Fax (0052-5)232-9115

Montreal  Branch
1501 McGill College Avenue / Suite 2060
Montreal, Quebec H3A 3M8
Tel  (514)985-0047
Fax (514)985-2610

Bank of Montreal Tower,
55 Bloor Street West, 8th Floor
Toronto, Ontario
M4W 3N5
Home Page:
Contact: John Graham, Ombudsman
Tel: 1-800-371-2541
Fax: 1-800-766-8029

Scotia Plaza,
44 King Street West
Toronto, Ontario
M5H 1H1
Home Page:
(416) 750-FUND (3863) (Greater Toronto Area)
1-800-268-9269 (Other Areas In Canada)

Bill Bailey, Ombudsman
Tel: 1-800-785-8772/(416) 933-3299
Fax: (416) 933-3276

Head Office
National Bank Tower
600 de La GauchetiSre West
Montreal, Quebec
H3B 4L2
Telephone: (514) 394-5000
Telex: 0525181
Home Page:
Elaine Carr
Director - Investor Relations
Telephone: (514) 394-0296
Fax : (514) 394-6196
Email :

Tour Banque Laurentienne
1981, McGill College Avenue
Montreal (Quebec)
H3A 3K3
Telephone:  (514) 284-4500 ext. 5996
Fax:  (514) 284-3396
Telex:  05-24217
Swift Code:  LBCMCAMM
Customer services: (514) 522-1846
1 800 LBC-1846
Home Page:
Michael Murray
Telephone:  (514) 284-4500 ext. 5907

P.O. Box 1
Royal Bank Plaza
Toronto, ON M5J 2J5
Phone: 416-974-5151
Home Page:
Investor Relations
Royal Bank of Canada
123 Front St West, Suite 600
Toronto, ON M5J 2M2
Phone: 416-955-7802
Fax: 416-955-7800

1188 West Georgia Street, 2nd Floor
Vancouver, BC V6E 4A2
Toll free number: 1-866-8mlhsbc (1-866-865-4722)
Home Page:
James H. Cleave, Chairman of the Board
Martin J.G. Glynn, President and Chief Executive Officer
J. Lindsay Gordon, Chief Operating Office

La #815 GC
1 Desjardins Complex
Montreal, QC H5B 1B3
Home Page:

BNP Tower
1981 McGill College avenue
Montreal, (Qc) H3A 2W8
Tel: (514) 285-6000
Fax: (514) 285-6278
Home Page:

Toronto, ON M5H 1J9, Canada
Phone: 416-204-3835
Fax: 416-595-0346

Headquarters for the Americas:
1251 Avenue of the Americas, New York, NY 10020-1104
Tel: (212) 782-4000
Fax: (212) 782-6415
Home Page:

Morgan Stanley, Dean Witter & Company
1585 Broadway
New York, New York 10036
United States
Phone: +1 212 761-4000
Fax: (212) 761-0086
Home Page


TELEFONICA CTC: Ongoing Strike Disrupts Service
About 23,000 Telefonica CTC Chile clients were left without
service on Friday after the Company's telephone lines were cut
with saws and axes, as unions entered their third week of strike.

Unions are striking to protest plans to reduce wages at the
country's biggest telephone company. Telefonica CTC had revealed
plans that it would freeze some salaries and make adjustments to
others to bolster earnings. Additionally, the Company would
reduce severance pay for a fired worker to 30 days per year
worked, from 40 days, and eliminate the severance pay for workers
who leave the Company.

Talks between the two sides are non existent. The unions won't
negotiate until the Company scraps the plan, union spokesman,
Daniel Droguett, said.

According to Droguett, the strike has reduced maintenance work
and halted service to some clients. He said the union hasn't
sabotaged lines.

"It's impossible for them to keep up service with most of their
employees on strike," said Droguett.

However, Telefonica CTC believes that savings from a plan to
reduce workers' pay and benefits would be greater than the cost
of disruptions in service from the strike. Telefonica CTC Chief
Executive Officer Claudio Munoz has said that the Company needs
to reduce costs to bolster earnings, which tumbled after
government-imposed reduction in its calling rates in 1999.

Telefonica CTC, which is 43.6% controlled by Spain's Telefonica,
posted net income of CLP4.1 billion ($6.5 million) last year,
compared with CLP130.1 billion in 1998, prior to the rate

CONTACT:  Telefonica CTC (Corporacion Telefonica Chilena S.A.)
          V. Providencia 111
          Providencia - Santiago
          Phone: (2) 2320511
                 (2) 6912020
          Home Page:
          Mr. Bruno Philippi, President
          Mr. Jacinto Daz, Vice President
          Gisela Escobar,  Head of Investor Relations


CHIVOR SA: Court Grants Extension to Oct. 21 for Schedules
Chivor S.A. E.S.P. sought and obtained approval from the U.S.
Bankruptcy Court for the Southern District of New York to extend
its time period to file with the Court its Schedules and
Statements. The Court allwed the Debtor until October 21, 2002 to
file its official Schedules and Statement of Financial Affairs.

In the event that the Debtor's Prepackaged Plan is confirmed
before October 21, 2002, the Court ruled that the requirement to
files its Schedules would also be waived permanently.

The Debtor is a corporation (sociedad anĒnima) and public
services enterprise organized and existing under the laws of the
Republic of Colombia and is the fourth largest electric power
generator in Colombia. The Company, which owns the third largest
hydroelectric power generator station, located in east central
Colombia filed for chapter 11 protection on July 6, 2002. Howard
Seife, Esq. and N. Theodore Zink, Jr., Esq. at Chadbourne & Parke
LLP represent the Debtor in its restructuring efforts. As of May
30, 2002, the Debtor listed $588,624,000 in assets and
$349,376,000 in debts.

          Bogota, Distrito Capital
          Cl 98 22-64 Of 518
          Tel: (57) (1) 6236660 - Fax: (57) (1) 6236837

CHIVOR SA: Gets Authority to Hire Ordinary Course Professionals
Chivor S.A. E.S.P. sought and obtained authority from the U.S.
Bankruptcy Court for the Southern District of New York to employ
professionals utilized in the ordinary course of business without
the submission of separate employment applications, affidavits,
and the issuance of separate orders for each individual

The services to be rendered by these ordinary course
professionals are not connected to the Debtor's chapter 11 case,
but include legal services with regard to specialized areas of
the law. The Court likewise authorized the Debtor to employ other
professionals in the ordinary course of business such as real
estate appraisers, brokers, auditors, actuaries and leasing
agents. The Debtor believes that the fees payable to the Ordinary
Course Professionals will not exceed in the aggregate $18,000 per

CHIVOR SA: Plan Confirmation Hearing Set for August 13
The United States Bankruptcy Court for the Southern District of
New York fixed the confirmation hearing to consider the adequacy
of the Disclosure Statement and the Solicitation Procedures and
to confirm the Plan of Chivor S.A. E.S.P. The Confirmation
Hearing will be held before the Honorable Burton R. Lifland in
Room 623 of the United States Bankruptcy Court for the Southern
District of New York, Alexander Hamilton Custom House, One
Bowling Green, New York, New York 10004, on August 13, 2002 at
10:00 a.m.

The Plan provides:

     i) that Existing Credit Agreement will be amended and
        holders of claims of indebtedness under the Existing
        Credit Agreement will be given all the rights and
        benefits of a "Lender" under the Amended Credit

    ii) that in respect of all other claims against he Debtor,
        they will be reinstated; and

   iii) that holders of authorized common stock of the Debtor
        (Equity Interests) will retain their interests.

Prior to the Petition Date, votes on the Plan were solicited from
holders of the Class 2 Senior Secured Claims, as the only
impaired class of creditors entitled to vote under the Plan. The
holders of the Class 2 Senior Secured Claims voted to accept the
Plan. The Debtor clarifies that it will not solicit further votes
on the Plan.


AEROVOX: Sells Mexican Unit to NGM; Shareholders Wiped Out
On June 28, 2002, pursuant to an auction held in the U.S.
Bankruptcy Court for the District of Massachusetts, Eastern
Division on June 4, 2002, Aerovox Incorporated ("the Company")
sold the Mexico City operation of its Aerovox de Mexico
subsidiary to Nueva Generacion Manufacturas S.A. de C.V. ("NGM").

The winning bid awarded to NGM totaled $2.6 million, which was
paid in cash. The assets sold included all inventory, machinery,
equipment, accounts receivable, prepaid expenses, information
technology systems, agreements, intellectual property, customer
data and marketing materials pertaining to the Mexico City
operation. The cash proceeds from the sale will be used to
satisfy a portion of the amounts owed to the Company's creditors.

Aerovox management believes the proceeds from this sale of assets
combined with the proceeds from the completed sale of the shares
of BHC Aerovox Ltd. on May 3, 2002 will not satisfy the Company's
debts owed to its secured and unsecured creditors; therefore, a
return of proceeds to the Company's shareholders is not

On June 6, 2001, Aerovox, which manufactures AC capacitors, DC
film capacitors, aluminum electrolytic capacitors, power factor
correction capacitors, and EMI filters, filed a voluntary
petition for bankruptcy protection, on behalf of its U.S.
operation under Chapter 11 of the U.S. Bankruptcy Code.

          167 John Vertente Boulevard
          New Bedford, MA 02745-1221
          PHONE: 508-994-9661
          FAX: 508-995-3000
          WEB SITE:

          Investor Relations Contact
          Lauren Belliveau
          Phone: 508-994-9661
          FAX: 508-910-3123

GRUPO BITAL: Goes On The Block Amid Mounting Pressure
Mexico's Grupo Financiero Bital finally considered negotiating on
its own behalf with possible bidders as pressure from Mexican
regulators mounts, the Wall Street Journal reports.

The bank had earlier agreed to raise more than US$400 million to
gain control of Banco Atlantico. It was able to secure US$107
million through rights offering in March, and was hoping to
acquire an additional US$100 million in fresh capital from
foreign institutional investors. It also anticipates selling
17.5% stake for US$200 million to ING Groep NV.

The National Banking and Securities Commission (CNBV), however,
after revising Bital's commercial credits portfolio, determined
the bank needing as much as US$550 million. Now a long-resisted
possibility of selling itself to a foreign partner is finally
being considered. The regulator is urging Mexico's fourth-largest
bank to increase capital to keep up with stricter banking
regulations next year.

According to the Journal, bidders for the bank include UK's
banking group HSBC Holdings PLC, and Spain's Santander Central
Hispano SA, who already owns 30% of Bital's voting rights.

Although Santander has recently concluded its evaluation of the
Mexican bank's loan portfolio, the Spanish group is still
undecided about what to do with its stake in the bank.

Santander already owns Mexico's third biggest bank group, Grupo
Financiero Santander Serfin SA, along with its independent unit
Santander Mexicano SA.  Acquisition of Bital is seen to cut cost
in Santander and to add 7.5% more in its 14% share of total
assets in the Mexican banking system.

Bital has 1,400 branches and six million clients nationwide.
Resisting foreign acquisition, it remains the biggest Mexican
bank under local control.

          Paseo De La Reforma
          No. 243, Cuauhtemoc,
          06500, Mexico ,D.F.
          Home Page:
          Investor Relations
          Act. Ricardo Garza Galindo Salazar

          Plaza de Canalejas,1
          28014 Madrid, Spain
          Phone: +34-91-558-10-31
          Fax: +34-91-552-66-70
          Home Page:
          Ana P. Botin, Chairman, Banesto
          Emilio Botin-Sanz, Chairman
          Francisco G. Rold n, Financial Division General Manager

          Investor Relations:
          Phone: + 34.91.558.13.69
                 + 34.91.558.10.05
          Fax: + 34.91. 558.14.53
               + 34.91.522.66.70

          ING GROEP N.V.
          Strawinskylaan 2631
          1077 ZZ Amsterdam,
          The Netherlands
          Phone: +31-20-541-54-11
          Fax: +31-20-541-54-44
          Home Page:
          Ewald Kist, Chairman
          Cees Maas, Chief Financial Officer

          10 Lower Thames St.
          London EC3R 6AE, United Kingdom
          Phone: +44-020-7260-0500
          Fax: +44-020-7260-0501
          Home Page:
          Sir John R. H. Bond, Group Chairman/Executive Director
          Sir Brian Moffat, Deputy Chairman/Senior Non-Executive
          Keith R. Whitson, Group Chief Executive

GUILFORD MILLS: Reorg Plan Keeps Mexican Operations Intact
Guilford Mills, Inc. said Friday it resented a plan to emerge
from bankruptcy proceedings. The plan represents the agreement
reached in cooperation with its major lenders. The process
requires approvals from the bankruptcy court, several creditors'
groups, and others. But the Company expects to emerge from
bankruptcy by Sept. 30 -- the end of its fiscal year.

"I'm very pleased to announce that in accordance with a term
sheet agreed to in March with our senior lenders, we filed with
the bankruptcy court Thursday a plan of reorganization that will
significantly reduce our senior debt, allowing us to focus on our
core operations," said John A. Emrich, Guilford Mills' President
and Chief Executive Officer. "Quite simply, we are moving toward
a swift and successful reorganization."

The plan's major provisions include:

* Based on claims filed, the Company's suppliers will be paid in

* Ownership of the Company will change: Guilford Mills' senior
lenders will own 90% of the Company, while its existing
shareholders will own the remaining 10%.

* Senior debt facilities, which will consist of a three-year
revolving credit facility and a three-year term loan, will total
approximately $150 million -- down from $270 million before
entering bankruptcy court.

Certain differences between the plan filed Thursday evening and
the term sheet signed in March include two trusts instead of one
to dispose of non-core assets, and elimination of a unanimous
board vote requirement to approve a business combination
transaction in the first year after emergence.

The Company plans to ask the U.S. Bankruptcy Court in New York on
August 15 for permission to submit the reorganization plan to

Sales and operating profits continue to exceed Guilford Mills'
expectations. Because of this strong performance and its solid
relations with its suppliers, the Company is not borrowing on its
court-approved, $30 million debtor-in-possession financing. The
sale of its non-core assets is proceeding according to schedule.

"We have many people to thank for helping us get to this point:
our suppliers and customers, our lenders and many others," Emrich
said. "I'm particularly proud of the extraordinary efforts of our
associates, who have served our customers so well as demand has
accelerated these past few months."

Guilford Mills is an integrated designer and producer of value-
added fabrics using a broad range of technologies. Its core
operations are automotive, technical textiles and its operations
in Mexico City, which participate in automotive and some apparel-
fabric manufacturing.

The Company, which was founded in 1946, has abandoned some of its
unprofitable businesses over the past several years as part of an
operations-restructuring plan, which included laying off more
than 2,000 employees. In its bankruptcy filing, Guilford Mills
listed $551 million in assets and $409.5 million in debts.

CONTACT:  Guilford Mills
          John A. Emrich, Chief Executive Officer
          Tel.: +1-336-316-4000

NII HOLDINGS: Restructuring Plan Seeks To Slash Debts 80%
NII Holdings Inc., a unit of Nextel Communications Inc. (NXTL)
has filed disclosure statement and reorganization plan that is
expected to bail the Company our of Chapter 11 bankruptcy, Dow
Jones reports. The restructuring plan proposes to reduce the
Company's total debt by about 80%, from US$2.7 billion to less
than US$500 million.

According to its second amended reorganization plan, the Company
will restructure secured debts through various financing
agreements with creditors, including Motorola Credit Corp., some
bondholders, and parent Nextel Communications. For Motorola
affiliates, NII considers paying 100% of US$73 million for
handset financing deals.

The Company will also issue new common stock and cancel existing
stock without payments to equity holders.

The financing agreement is anticipated to bring in US$190 million
of new capital, US$140 million of which would be in the form of a
rights offering of new senior secured notes and warrants to

Although expecting a net loss of US$286.8 million in 2002, under
the new business plan, the Company expects to steadily increase
its net income: US$955,000 in 2003, US$68.2 million in 2004,
US$107.5 million in 2005 and US$147.4 million in 2006. It also
sees earnings before interest, tax, depreciation and
amortization, increasing from US$84.8 million in 2002 to US$160.3
million in 2003; and its EBITDA increasing each year through
2006, when it anticipates EBITDA of US$449.9 million.

According to the plan, general unsecured creditors would receive
their pro-rata share of 4 million shares of new common stock.
Unsecured creditors would also be granted rights to purchase
their pro-rata share of up to US$140 million of new NII senior
notes and up to an additional 16 million shares of new common
stock, constituting 80% of the ownership in the reorganized

Unsecured creditors have claims totaling an estimated US$2.36

The Nextel unit expects to pay 100% of its about US$281.7 million
in secured claims. The secured creditors would receive US$56.65
million in cash plus interest on any outstanding loans and
preferred stock after the reorganization.

The international wireless communications services provider filed
for Chapter 11 bankruptcy protection May 24 listing assets of
US$1.24 billion and liabilities of US$3.26 billion as of Dec. 31,

NII Holdings, Inc., formerly known as Nextel International, is a
substantially wholly owned subsidiary of Nextel Communications.
NII has operations in Mexico, Brazil, Peru, Argentina, Chile and
the Philippines. It offers a fully integrated wireless
communications tool with digital cellular, text/numeric paging,
wireless Internet access and Nextel Direct Connectr, a digital
two-way radio feature.

CONTACT:  NII Holdings Inc.
          Claudia Restrepo
          Phone: +1-305-779-3086


          One Rodney Square
          P. O. Box 551
          Wilmington, Delaware 19899
          Phone: (302) 651-7700
          Fax: (302) 651-7701
          Home Page:
          Daniel J DeFranceschi
          Phone:  (302) 651-7816
          Fax:  (302) 784-7090

          MOTOROLA, INC.
          1303 East Algonquin Road
          Schaumburg, IL 60196
          Investor Relations Contacts:
          Ed Gams
          Senior Vice President/Director of Investor Relations
          Phone: 847-576-6873
          Bob Hubberts, Manager, Investor Relations
          Phone: 847-576-4995

          2001 Edmund Halley Dr.
          Reston, Virginia 20191
          Corporate Communications
          Phone: 703-433-4700
          Contact: William E. Conway, Jr., Chairman of the Board
          Timothy M. Donahue, President/Chief Executive Officer


TELEFONICA DEL PERU: Fitch Reviews WorldCom Exposure, Watch Neg
Fitch Ratings has placed the rating of Telefonica del Peru (TDP)
Grantor Trust, the company's international net-settlement
securitization, on Rating Watch Negative. The 'BBB+' rating has
been placed on Rating Watch primarily because of exposure to
WorldCom. Fitch downgraded WorldCom's senior unsecured ratings to
'CC' from 'B' on June 26, 2002. WorldCom contributes
approximately 25% of the securitization's cash flows. As of June
30, 2002, WorldCom has had no delinquent payment on net
settlement obligations to TDP. However, the potential for an
interruption of payments by WorldCom to TDP Grantor Trust creates
uncertainty for the transaction.

Most recent coverage levels for the securitization are
approximately 2.2 times (x). These coverage levels have
significantly improved with respect to the end of last year
(coverage ratio of 1.2x) after TDP voluntarily paid down half of
the transaction's outstanding balance. In addition, to paying
down debt, the company increased the reserve account, which
currently stands at US$8.6 million. The company has consistently
shown a strong willingness to support the securitization and
continues to take proactive measures to protect investor
interests. While Fitch believes the insolvency of WorldCom would
not have a lasting effect on call volume between the U.S. and
Peru, the short-term cash flow loss and resulting uncertainty
over who would win competition for replacement traffic causes
concern for the securitization. Fitch continues to monitor the
transaction closely and will take appropriate rating action as

          Sam Fox, 1-312-606-2307
          Randy Alvarado, 1-312-368-3117
          James Jockle, 1-212-908-0547 (Media Relations)


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.

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