TCRLA_Public/030117.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

           Friday, January 17, 2003, Vol. 4, Issue 12



PEREZ COMPANC: Extends Exchange Offer to Jan 22
REPSOL YPF: Ex-Employees File Suit For Unfair Dismissal

* Argentina Seeks Brief Debt Payment Extension From IADB


ACESITA: Posts Improved 2002 Financial Results


ENERSIS: Weak Financial Performance Prompts Moody's Downgrades
MADECO: Stands To Benefit From Settlement Over Beer Conflict


JUTC: 300-Worker Lay-off Expected Next Week
KAISER ALUMINUM: Filings Won't Affect Jamaican Operations


CORPORACION DURANGO: Misses Jan 15 Interest Payment
FEMSA: Contradicts Reports Suggesting Spin Off Of Beer Division
GRUPO TMM: Moody's Cuts Ratings On Concern Bond Swap May Fail
GUILFORD MILLS: Reveals Closure of Mexican Ops In Annual Filing

T R I N I D A D   &   T O B A G O

CARONI LTD: Staff Protest Halts Operations


UTE: Price Hike Proposal Awaits President's Approval

     -  -  -  -  -  -  -  -


PEREZ COMPANC: Extends Exchange Offer to Jan 22
Perez Companc S.A. (Buenos Aires: PC NYSE: PC), informed
Wednesday that its subsidiary Pecom Energia S.A. (Buenos Aires:
PECO) announced that the expiration date of the Exchange Offer
announced on January 8, has been extended until 3:00 P.M., Buenos
Aires time, on Wednesday, January 22, 2003.

Except for the extension of the Expiration Date described herein,
the terms and conditions of the Exchange Offer and the New Notes
described in the Pricing Supplement remain unchanged.

Pecom Energia S.A., controlled by Perez Companc S.A., is a
leading company in an important Argentine and Latin American
industry sector, including oil and gas production and
transportation, refining and petrochemicals and power generation,
transmission and distribution.

          Maipo 1 - Piso 22 - C1084ABA
          Buenos Aires, Argentina
          Phone: (54-11) 4344-6000
          Fax: (54-11) 4344-6315

REPSOL YPF: Ex-Employees File Suit For Unfair Dismissal
Former employees of the Bolivian subsidiary of Spain's Repsol-
YPF, who got fired for malpractice, lodged legal proceedings
against the Company, claiming they were not properly paid,
reports Business News Americas. The 16 employees are are
initiating legal action against Repsol for unfair dismissal. The
suit seeks almost US$600,000 in compensation. The employees said
they did not receive the correct redundancy payments.

According to Repsol Bolivia's legal affairs representative Martin
Anez, "Repsol-YPF has already presented a claim establishing its
disagreements with the errors committed by the plaintiffs."

The dismissal of the employees came after an internal
investigation carried out by US risk consulting firm Kroll found
they were accomplices in a ring that was stealing crude oil and
fuel, as well as taking kickbacks for awarding contracts.

Some of the plaintiffs were Argentine employees transferred to
work in Bolivia. They were claiming rights under Argentine laws,
despite the fact that they were employed in Bolivia under local
work contracts, Repsol Bolivia spokesperson Miguel Cirbian said.

         Head Office
         Paseo de la Castellana 278
         28046 Madrid
         Tel  +34 91 348 81 00
         Fax  +34 91 348 28 21
         Telex  48162 RESOLE
         Alfonso Cortina de Alcocer, Chairman
         Jose Vilarasu Salat, Vice Chairman
         Antonio Hernandez, Vice Chairman

* Argentina Seeks Brief Debt Payment Extension From IADB
Argentina is seeking to postpone a debt payment to the Inter -
American Development bank after failing to make the US$680
million payment due on Wednesday. Earlier reports suggested that
the country would use central bank reserves to make the required

However, Ambito Financiero reported that the country is waiting
for a sign that the International Monetary Fund will grant it a
new loan package before paying its lenders. Meanwhile a report
from the Associated Press said that the IMF wants the country to
meet all its obligations with multilateral lenders before it
agrees to lend the Argentina money to rollover debts maturing
within the first half of this year.

The IADB is expecting only a brief delay in the repayment,
according to AP. The payment to the IADB was originally due last
month, but an automatic 30-day rollover period allowed the
country to pay until today. The country faces another US$90
million debt due to the IMF maturing on Friday.

Earlier, Argentina and the IMF had signed a draft letter of
intent. Members of the IMF negotiating team stayed in the country
until yesterday, in case the LoI may need some modification.


ACESITA: Posts Improved 2002 Financial Results
Brazilian stainless steelmaker Acesita said net revenue grew in
2002 because of its focus on value-added products, relates
Business News Americas. According to preliminary results
submitted to the Sao Paulo stock exchange (Bovespa), Acesita
registered net revenue of BRL1.7 billion in 2002, a 29.3%
increase from the previous year's record. The Company also
registered a 53% increase in Ebitda to BRL432 million in 2002
compared to the year before.

"We hope to close 2003 with Ebitda of US$200 million," Lima
Fernandes said. Acesita plans to release final results for 2002
including its full income statement in March.

Total sales volumes fell 4.7% last year compared to 2001, or from
704,000t to 671,000t. Domestic sales volumes dropped 4% in 2002,
although Lima Fernandes forecasts the figure will rise 6-7% in

Exports are also forecast to increase this year. Acesita exported
52% of its output or 315,000t in 2002, and predicts exports will
total 430,000t or 60.4% of 2003's total output.

Katia Brollo, a steel analyst for investment bank Unibanco, said
Acesita's results were "excellent" and within the market's

"The increase in sales revenues and exports show that the
investment Acesita made to concentrate on higher valued-added
steel is right on target," she said.

Acesita is planning to sell its stake in Espirito Santo-based CST
worth US$205 million in an effort to reduce debts this year to
US$500 million. 80% of the total debt amount will be tied to the
dollar. At the end of 2002, Acesita's debt stood at US$700

The Company, whose owners include Luxembourg-based steel group
Arcelor, is Latin America's sole integrated producer of flat-
rolled stainless and silicon steels with an annual production
capacity of 850,000 tons of liquid steel.

CONTACT:  Acesita SA
          Registered Office
          Av Joao Pinheiro, 580
          30130-180 Belo Horizonte - MG
          Tel  +55 31 3235-4211
          Fax  +55 31 3235-4300
          Valmir Marques Camilo, Chairman
          Bruno Le Forestier, Vice Chairman


ENERSIS: Weak Financial Performance Prompts Moody's Downgrades
Moody's Investors Service announced that it placed under review
for possible downgrade the Baa3 senior unsecured ratings of
Chilean power sector holding Enersis and its generation
subsidiaries Endesa Chile and Pehuenche.

Moody's attributed the review to the following factors:

- weak financial performance for their rating category;

- lower than anticipated earnings and cash flow;

- concerns about return on investments from Argentina and Brazil;

- substantial refinancing needs; and

- concerns about the pace of announced initiatives to sell assets
and improve cash flow and balance sheet.

Moody's said the review of Pehuenche and Endesa Chile reflects
its view that the credit risk of each is closely linked to the
strength of Enersis.

Poor results from Argentina and Brazil, as well as debt resulting
from past acquisition and expansion, have contributed to Enersis'
weak financial performance, Moody's said, adding that debt-
reduction plans have been delayed by not completing announced
asset sales.

Enersis faces approximately US$700 million in public bonds coming
due in 2003, and is negotiating the refinancing of US$2.2 billion
in bank debt.

Moody's senior credit officer Robert Johnson said there is not
much doubt that Enersis will secure the funds for the bond
payments. A bigger concern is whether it can secure the funds on
terms and conditions consistent with its credit rating, Johnson

To see financial statements:

          Investor Relations:
          Ricardo Alvial
          Chief Investments & Risks Officer of Enersis
          Phone: (562) 353-4682
          Susana Rey,
          Ximena Rivas,
          Pablo Lanyi-Grunfeldt,

MADECO: Stands To Benefit From Settlement Over Beer Conflict
Chilean Luksic group's holding company Quinenco is expected to
launch an equity issue for its ailing copper wire and cable
manufacturer Madeco after reaching settlement with Germany's

Estrategia reports that Chilean brewer CCU, also controlled by
Quinenco, resolved a conflict with Schorghuber at the Paris
International Court of Arbitration. Under the terms of the
settlement, the German beer-maker will pay Quinenco US$50 million
by the end of this month.  In addition, Quinenco will also
receive dividends pending from 2002 and previous years of US$73

All in all, Quinenco is expected to receive a total of US$123
million, a large part of which will be used for an equity issue
in Madeco, according to analyst Roberto Guzman.

The Luksic group has committed to providing some US$70 million to
the equity issue, in order to raise around US$130 million. Under
a bank-sponsored restructuring plan, Madeco will use the new
capital to pay 30% of what it owes each creditor upfront.

This will be the second attempt Madeco has made to launch an
equity issue to raise capital in order to restructure debts. The
first attempt in September last year, hoped to raise US$90
million, collapsed when only Quinenco, which has 56.5% of Madeco,
took up the offer.

Madeco's debts total some US$325 million, including US$100
million in long-term bonds and US$100 million related to its

          Ureta Cox, 930
          San Miguel, Santiago, Chile
          Phone: 56-2 5201461
          Fax: 56-2 5516413
          Home Page:
          Oscar Ruiz-Tagle Humeres, Chairman
          Albert Cussen Mackenna, Chief Executive Officer

          Investor Relations
          Phone: 56-2 5201380
          Fax:   56-2 5201545


JUTC: 300-Worker Lay-off Expected Next Week
The Jamaica Urban Transit Company (JUTC) will fire 300 employees
beginning next week, reports The Jamaica Gleaner. The workforce
reduction is being carried out on the recommendation of the
Company's Swiss consultants.

Roughly 10% of the total number of employees will lose their
jobs. According to the report, about 40% of the
inspectors/dispatchers will be axed along with 10% of conductors,
3% of drivers. Other employees to be affected by the job cuts are
a number of cleaners, janitors and middle managers. The report
said the name of the employees to be axed may be given to the
unions tomorrow.

Employees were informed of the impending retrenchments at a
meeting at the Lyndhurst Road depot in Kingston. The University
and Allied Workers' Union (UAWU), representing 2,500 out of 3,000
JUTC workers, was also present during the meeting. UAWU Vice
President Clifton Graft warns that a bigger job cut will be done
by the end of January.

The job cuts, initially scheduled to start this week, were
postponed at the UAWU's request, in the hopes of discussing the
developments with its members.  

The Company aims to reduce the worker-to-bus ratio to 6:1 from

The union held its first meeting on Tuesday. Yesterday, the
meeting was scheduled in Ashenheim Road, but took place in
Pertmore, south St. Catherine. Tomorrow, the parties will meet at
the Spanish Town head office, central Ct. Catherine.

KAISER ALUMINUM: Filings Won't Affect Jamaican Operations
Kaiser Aluminum & Chemical Corporation filed Tuesday voluntary
petitions with the U.S. Bankruptcy Court for the District of
Delaware under Chapter 11 of the Federal Bankruptcy Code. The
filing included legal entities through which Kaiser owns
interests in Jamaica.

However, Business News Americas reports the Company said that
from an operating perspective, the filings were a non-event and
said that its local investments - Alpart, the alumina refinery,
and KJBC (Kaiser Jamaica Bauxite Company) - were not directly
included in the filings.

Kaiser added the filings were not prompted by cash flow concerns,
business conditions, or balance sheet issues and should have no
impact on the day-to-day operations at Alpart or KJBC, or the
rest of Kaiser, its employees, customers, and suppliers.

"They will not interfere with the ability of Alpart or KJBC to
continue to make payments in the normal course of business
(including payments of pre-petition amounts) to creditors and
others for items such as materials and supplies, freight, taxes
and, of course, salaries, wages, and benefits for employees,"
said Jack A. Hockema, Kaiser's president and chief executive
officer, in a statement.

CONTACT:  Kaiser Aluminum Corporation, Houston
          Scott Lamb, 713/332-4751


CORPORACION DURANGO: Misses Jan 15 Interest Payment
Just as Fitch expected, Mexican paper and packaging concern
Corporacion Durango SA missed an interest payment Wednesday on
its 13.75% notes due 2009.

Dow Jones reports that in a filing with the Mexican Stock
Exchange, the Company said that 30 days after a missed payment,
the notes will be considered in default under terms of the issue.

Durango has retained Rothschild Inc. and PricewaterhouseCoopers
to advise it about debt restructuring alternatives. The Company
also hopes to begin formal discussions with creditors in the near

Fitch Ratings recently downgraded the unsecured corporate foreign
and local currency ratings of Durango to 'C' from 'B+'. In
conjunction with the rating action, Fitch also downgraded the
ratings of the senior unsecured notes due in 2003, 2006, 2008 and
2009 to 'C' from 'B+', signaling an imminent default. Fitch said
the outstanding amount of debt for these notes is US$18.2
million, US$301.7 million, US$10.3 million and US$175 million,

           Mayela R. Velasco
           +52 (1) 829 1008

           Arturo Diaz Medina
           +52 (1) 829 1015

FEMSA: Contradicts Reports Suggesting Spin Off Of Beer Division
Fomento Economico Mexicano (Femsa), one of the top drinks
companies in Latin America, is not planning to spin off its 112-
year-old brewery, Cuauhtemoc-Moctezuma, as what recent reports
are suggesting, says Reuters.  Femsa quashed those reports and
said those were "totally false."

Since the Dec. 23 announcement from its soft drinks arm Coca-Cola
Femsa of plans to buy Panamerican Beverages Inc for US$2.7
billion plus debt, reports have come out that Femsa might sell
its ailing beer division and focus on its Coke bottling business.

Coca-Cola Femsa, which is 51% owned by Femsa, wants to merge
Panamco and Coca-Cola Femsa to create the world's No. 2 Coca-Cola
bottler and the top Coke bottler in Latin America with the
acquisition. But some see it as a move away from Femsa's beer

Also, Femsa's national beer market share has been down to about
43% from more than half domestic sales a decade ago, adding more
fuel to speculation that Femsa might abandon beer before its
brews become an embarrassing historical luxury and financial

"It's not far fetched at all for me that Femsa should look at
selling its beer division," said one analyst who declined to be
named. "If a big name came along offering five times book value,
Femsa would seriously have to look at the offer."

Cuauhtemoc-Moctezuma is a producer of brands such as Sol, Tecate,
Superior, and XX Lager.

CONTACT:  FEMSA Fomento Economico Mexicano Sa de Cv
          Head Office
          Gen Anaya 601 Poniente Col
          Bella Vista
          Monterrey Nueva Leon
          Mexico CP
          Mexico 64410
          Tel  +52 81 8328 6000
          Fax  +52 81 8328 6080
          Eugenio Garza Laguera, Honorary Chairman   
          Jose Antonio Fernandez Carbajal, Chairman and CEO   
          Juan Carlos Braniff, Director

GRUPO TMM: Moody's Cuts Ratings On Concern Bond Swap May Fail
Moody's Investor Services downgraded Grupo TMM's debt rating to
seven levels below investment grade on concern investors may not
accept an exchange offer to lengthen maturities on its bonds.

Grupo TMM, Mexico's largest transportation company, had the
ratings on US$400 million worth of bonds downgraded by Moody's to
Caa1 from B2, with a negative outlook on the rating.

"In the absence of a successful exchange, there is a high
probability of default on TMM's bonds," Moody's said in a

In December, TMM announced a planned offer to exchange its US$200
million of 9 1/2 bonds due in May next year and US$200 million of
10 1/4 bonds due in 2006 for US$400 million of 10 3/4 bonds that
mature in 2009.

The new bonds will be guaranteed by the holding company that owns
TFM, the Company's rail unit. That will leave those bondholders
who don't participate in the exchange with debt that has fewer
guarantees, Moody's said.

The bond exchange offer expires on Feb. 11, but could be extended
by the Company.

To see financial statements:

          Jacinto Marina, 011-525-55-629-8790

          Brad Skinner (IR), 011-525-55-629-8725

          Luis Calvillo (MR), 011-525-55-629-8758

          Dresner Corporate Services
          Kristine Walczak (MR, IR), 312/726-3600

GUILFORD MILLS: Reveals Closure of Mexican Ops In Annual Filing
Guilford Mills Inc. revealed in its annual report for the year
ended Sept. 29, 2002, filed late Tuesday with the Securities and
Exchange Commission that it has closed its dyeing and finishing
plant in Altamira, Mexico, reports Dow Jones. Closure is part of
the Company's efforts to scale down its apparel segment.

When it emerged from Chapter 11 bankruptcy protection in October,
the Company said it expects to continue to allocate resources
primarily to its automotive business because management believes
the segment to be less susceptible to competition from foreign
imports than apparel and home fashions fabrics.

As reported, Guilford Mills and 13 affiliates filed Chapter 11
petitions March 13, 2002, with the parent company listing assets
of US$551 million and debts of US$409 million as of Sept. 30,

The Company's reorganization plan took effect Oct. 4.

To see financial results:

          4925 West Market Street, Greensboro, NC
          Phone: (336) 316-4000
          Home Page:
          David H. Taylor, Interim Chief Financial Officer

T R I N I D A D   &   T O B A G O

CARONI LTD: Staff Protest Halts Operations
Operations at Caroni Ltd.'s sugar factories were unable to
commence grinding operations as members of its joint staff
association assembled outside the embattled company's head office
on Tuesday in protest of the government's handling of its

The joint staff association includes the Association of
Technical, Allied and Supervisory Staff (ATASS); Sugar Industry
Staff Assoc (SISA); Estate Police Assoc (EPA) and the Sugar
Boilers' Assoc (SBA).  A report released by the Trinidad Guardian
revealed that the association was asking for a meeting with
Caroni Chairman, Kusha Harracksingh.

Although, the staff unions are not against the restructuring,
they want it to be done in a "humane and transparent" manner.

Staff representatives met with Harracksingh after a closed-door
meeting with the Company's chief executive officer William
Washington. Harracksingh reportedly promised them to take their
concerns to the ministerial committee overseeing Caroni's
restructuring. Harracksingh then went to meet with Dr Lenny
Saith, chairman of the Committee, promising to return to the

According to Jairam Ramkissoon, president-general of SISA, said
that the protesting employees will remain outside until
Harracksingh returns from his meeting with Saith. He added that
the staff unions' demands must be met first, before any
restructuring is done to Caroni.

The report did not indicate whether Harracksingh returned to
protesting workers that day.

Meanwhile, the Company's operations in itd two sugar factories in
Brechin Castle and Usine Ste Madeleine remain at a standstill..
Canefarmers were advised to stop cutting canes before the issue
with the staff is resolved.

CONTACT:  Caroni Limited
          Old Southern Main Road, Caroni,
          Trinidad & Tobago
          Phone: (868) 663-1781 or 662-0879
          Fax: (868) 663-1404


UTE: Price Hike Proposal Awaits President's Approval
Uruguay's state power company UTE is close to implementing a
proposal to raise power prices by an average of 12%, Business
News Americas indicates.

According to UTE Chairman Ricardo Scaglia, the proposal, which
already has the approval of the board, needs the final approval
of Uruguayan President Jorge Batlle for it to become effective.
Such process normally takes only a few days.

Recently, UTE implemented an 8% price hike in November. But that
wasn't enough to help the Company recover from the effects of the
devaluation of the Uruguayan peso against the US dollar, as 50%
of the Company's costs are linked to the dollar, Scaglia said.

UTE officials wanted to a price hike of 16%, he added.

CONTACT:  UTE  (Administracion Nacional de Usinas y Transmisiones
          Jujuy 2627
          11800 Uruguay
          Phone: (5982) 2003062
          Home Page:
          Contacts:  Esc. Ricardo Scaglia, President
                     Jaime Pienica, Vice President


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 Oona G. Oyangoren, Editors.

Copyright 2003.  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
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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,
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