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       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, February 14, 2001, Vol. 2, Issue 32

                           Headlines


A R G E N T I N A

RECOL: To Restructure; Mulls Closing Down Two Subsidiaries


B R A Z I L

CAEMI: BHP Agrees To Pay $332M For Controlling Stake
COSIPA: One Of Bovespa's Best Performers Last Week
CVRD: Approves This Year's $1.1B Investment Plan
INEPAR: Signs Deal With Ahlstrom To Expand Aracruz Plant
SASSE: Funcef To Sell Controlling Stake In Insurer
VESPER: Faces Serious Crisis; To Cut 1/3 Of Workforce


E C U A D O R

CEMENTOS CHIMBORAZO: BNF Readies For Privatization


M E X I C O

CINTRA: IPAB Names Merrill Lynch As Sale Agent
ICA: Begins To See Recovery As Shares Soar 30 Percent
SPORTSYA!: Not On The Verge Of Bankruptcy
UNEFON: TV Azteca Announces Noteholder Consent Solicitation
XEROX: Takes 80 Percent MHV Capital


     - - - - - - - - - - -


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

RECOL: To Restructure; Mulls Closing Down Two Subsidiaries
----------------------------------------------------------
Spain-based content and ecommerce service provider Recol Networks
(www.recol.es) has decided to restructure its operations,
according to Spain's securities regulator CNMV in a
BNamericas.com report Monday. Currently, it is evaluating whether
to close down its Mexican and Argentine subsidiaries. Recol's
board will initiate an "evaluation of the liquidation and
closure" of these two operations, for which the company is
"seeking legal advice about its rights and obligations in this
process", the CNMV said in a statement.

Recol, in a revised business plan, is seeking operational cost
reduction of 69 percent and would cut 41 percent of its total
workforce.



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

CAEMI: BHP Agrees To Pay $332M For Controlling Stake
----------------------------------------------------
Australia's BHP Ltd. agreed to pay $332 million for the 60
percent voting stake owned by the Frering brothers in the
Brazilian mining company Caemi, according to a Reuters report
Monday edition. The Australian company, however, made it clear
that it does not intend to share its acquisition with Companhia
Vale do Rio do Doce (CVRD), which also openly admitted it wants
Caemi even if it means sharing it with BHP and Mitsui.

Japanese company Mitsui owns the other 40 percent of Caemi's
voting shares. Mitsui is rumored to have an agreement with CVRD
under which it would use its preference rights only to pass them
on to CVRD, in the event the latter failed to be the successful
bidder. However, BHP said it knew of no deal between CVRD and
Mitsui.

"We have talked to Mitsui and the impression is there is no
agreement," Paulo Bahia Guimaraes, the head of BHP's Brazilian
unit, said. "And if there was an agreement the market and the CVM
(local market regulator, the Securities and Exchange Commission)
would have to be informed."

According to analysts, the BHP offer was the end of the first
round in the fight for Caemi. The next round would depend on what
Mitsui decides to do.

BHP also confirmed market expectations by saying it would make a
delisting tender offer for Caemi's preferred shares after the
acquisition if shareholders gave their approval.


COSIPA: One Of Bovespa's Best Performers Last Week
--------------------------------------------------
Brazilian steel company Companhia Siderurgica Paulista (Cosipa)
was among the best performers on the local stock exchange
(Bovespa) last week, according to Brazil Financial Wire Monday.
Its common stock jumped 46.3 percent on 60 trades and its
preferred shares advanced 25.5 percent on 494 transactions.

The rally in Cosipa started last month, amid reports that CVM,
Brazil's securities and exchange commission, was to revise the
company's ongoing restructuring upon request of minority
stockholders.

Cosipa is the fourth largest steel producer in Brazil in terms of
crude steel capacity (3.9 million tons).


CVRD: Approves This Year's $1.1B Investment Plan
------------------------------------------------
Brazilian mining group Cia Vale do Rio Doce agreed to an
investment plan of $1.1 billion for this year, saying that the
plan does not include acquisitions, Reuters reported Monday.

Some 76.6 percent of it will go to mining and transportation,
which, according to the company, was the continuation of its
policy of focusing on core businesses.

The company also allotted $114 million this year for its new Sao
Luis iron pellets plant so that it could begin producing 6
million tonnes of pellets annually from 2002.

Around $27 million will go to the expansion of the pellets unit
of Cia Siderurgica de Tubarao (CST), which it co-owns.

The company plans to spend nearly $180 million on electricity
projects as it anticipates an increase in electricity prices from
2003, when Brazil's power market will be fully free from
government-fixed prices

In addition, maintenance at all of the company's holdings will
get some $240.2 million of the investment plan this year.


INEPAR: Signs Deal With Ahlstrom To Expand Aracruz Plant
--------------------------------------------------------
Brazilian construction group Inepar signed a deal with Finland's
Andritz Ahlstrom to jointly expand Aracruz's plant in the state
of Espirito Santo, Brazil Financial Wire reported Monday. The
value of the deal, which is said to be part of a larger R$153-
million contract between Ahlstrom and Aracruz, is R$95 million.
Inepar is expected to take some 18 months to complete the Aracruz
factory expansion works.


SASSE: Funcef To Sell Controlling Stake In Insurer
--------------------------------------------------
Caixa Economica Federal's employee pension fund (Funcef)
announced it might sell a 50.75-percent stake in insurance
company Caixa Seguros (Sasse) soon, Bloomberg reported Monday.
The announcement came after Judge Romulo de Souza Pires of the
3rd District court lifted an injunction last week suspending the
sale, which could fetch around 1.2 billion reais ($605 million).

The fund will hold a private auction in which each bidder will
submit two proposals. It wants to sell Sasse's controlling stake
to the company that offers the highest per-share bid. Funcef
hasn't ruled out maintaining a minority stake in Sasse.

Funcef is the pension fund of the country's second largest state-
owned retail bank. The fund has to reduce its stake in Sasse
because Brazilian pension funds can't have more than a 20 percent
interest in a company, according to pension fund investment
regulations. Goldman, Sachs & Co. and Boston Consulting Group
Inc. have been retained to advise on the sale.


VESPER: Faces Serious Crisis; To Cut 1/3 Of Workforce
-----------------------------------------------------
Brazilian long distance carrier Vesper is facing a serious crisis
and will go through a restructuring process, according to a South
American Business Information report Monday. The company plans to
dismiss 1,500 of its 4,000 employees and is reportedly on the
hunt for a joint venture or partnership with another telecoms
carrier. Currently, Bell Canada, holder of a 34-percent interest,
is said to be evaluating a possible partnership with one of the
winners in the C, D and E band tenders.

In addition, Velocom's CFO Barry Rowan will be replacing Virgilio
Freire as Chairman of Vesper. Rowan owns a 50-percent stake in
Vesper.



=============
E C U A D O R
=============

CEMENTOS CHIMBORAZO: BNF Readies For Privatization
--------------------------------------------------
In order to prepare cement company Cementos Chimborazo for
privatization, the Ecuadorian development bank Banco Nacional de
Fomento (BNF) hired Vistech Corp. to evaluate the company's
assets, South American Business Information said Monday. BNF
controls 95.21 percent of Cementos Chimborazo. In 1995, assets of
Cementos was valued at US$40 million. Last year, it registered
profits of US$5 million.



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

CINTRA: IPAB Names Merrill Lynch As Sale Agent
----------------------------------------------
The Mexican bank bailout agency IPAB declared Merrill Lynch's
Mexico office as the sale agent, which will handle the imminent
breakup and sale of government-owned airline holding company
Cintra, El Economista/Infolatina said Monday. Cintra also
announced that its subsidiaries  -- several airlines and other
air-transport service companies - would be sold separately.

Last year, the Federal Competition Commission (CFC), Mexico's
antitrust agency, ruled that Cintra, which controls leading
carriers Aeromexico and Mexicana, would need to be broken up and
sold.


ICA: Begins To See Recovery As Shares Soar 30 Percent
-----------------------------------------------------
Mexico's largest construction company Empresas ICA Sociedad
Controladora SA saw its share price jump 30 percent as its low
valuation and recent efforts to restructure operations attracted
investors, Bloomberg said Monday.

"It looks like the company is coming out of all the troubles it
faced recently," said Gonzalo Fernandez, an analyst at Santander
Investment, who in late January raised the company to "buy" from
"underperform."

Last month, the construction company announced it sold three
construction material companies to Vulcan Materials Company for
$121 million in January. Additionally, it announced plans to sell
$270 million in assets this year. These recent announcements have
convinced investors that the company is on a more solid financial
footing than previously.

ICA's recovery follows two years of restructuring at the company,
which included asset sales, and debt reduction.


SPORTSYA!: Not On The Verge Of Bankruptcy
-----------------------------------------
Executives at SportsYa! confirmed that while the current
financial situation at the Latin American sports web portal is
not perfect, it is not on the verge of bankruptcy. The
announcement in a Reforma/Infolatina report published Monday was
intended to disprove recent reports suggesting that its current
financial situation could propel it to file for bankruptcy.
According to company executives, the company has reoriented its
activities toward the traditional media business, producing
television programs and promoting live sports events. It could
soon cease operations in some countries, to focus on Mexico,
Argentina and Spain, where its operations already are profitable.
Last year SportsYa! made 12 million dollars in advertising sales,
of which 4 million dollars came from Mexico


UNEFON: TV Azteca Announces Noteholder Consent Solicitation
-----------------------------------------------------------

- To complete Unefon spin-off and focus on TV Azteca's core
business -

- TV Azteca Noteholders to benefit from fee payment and future
offer to purchase at premium -

- Azteca Holdings Noteholders to benefit from fee payment and
additional collateral if Unefon is sold -

TV Azteca, S.A. de C.V. (NYSE: TZA; BMV: TVAZTCA), the second
largest producer of Spanish-language programming in the world,
announced today that it is soliciting consents from TV Azteca and
Azteca Holdings Noteholders to permit the Company to spin off its
investment in Unefon to its shareholders.

"In the future, TV Azteca will focus on our core media business,"
noted Luis J. Echarte, the CFO of TV Azteca. "With the spin-off
of Unefon, management will be able to devote all our efforts to
developing our two principal lines of business: domestic content
and distribution, and international distribution. In addition, TV
Azteca will have a stronger financial position, which will
directly benefit all of our stakeholders."

With the Noteholder consents, TV Azteca's transfer of its
interest in Unefon to its shareholders will take the form of a
pro-rata grant of Rights to purchase TV Azteca's Unefon shares
that will be attached to TV Azteca's shares. These Rights will be
exercisable in December 2002 at an aggregate exercise price of
approximately US$177 million, the receipt of which will
strengthen TV Azteca's financial position. The exercise date will
be accelerated in the event of a strategic sale or tender offer
for Unefon or if the Board of Directors otherwise determines to
do so.

Consenting TV Azteca and Azteca Holdings Noteholders will receive
an up-front consent fee payment. TV Azteca will also offer to
purchase 25 percent of the outstanding TV Azteca Notes at a
premium if the exercise of the Rights is accelerated or if the
Board of Directors determines to do so before December 2002.
Azteca Holdings will receive Rights as a shareholder of TV
Azteca. The Unefon shares received upon exercise of such Rights
and the net proceeds from the sale of such shares in connection
with a strategic sale of Unefon will become additional collateral
for the Azteca Holdings Notes.

Separate Rights attached to TV Azteca shares will also be granted
to acquire TV Azteca's interest in a newly formed company, known
by the trade name "Telecosmo," which will acquire Unefon's 3.4
and 7 GHz frequency licenses. These Rights will have an aggregate
exercise price of approximately US$32 million, and will become
exercisable within four to six years. The exercise date will also
be accelerated in the event of a strategic sale of or tender
offer for Telecosmo or if the Board of Directors otherwise
determines to do so.

"The granting of Rights to shareholders will take place with the
consent of the majority of Noteholders," said Mr. Echarte. "We
believe that the proposal we have crafted should be attractive to
Noteholders, who will receive an upfront fee, and in the event
the exercise date of the Rights is accelerated, partial
repurchase of the notes at a premium at the TV Azteca level, and
additional collateral at the Azteca Holdings level. We want all
stakeholders to benefit from the value we have created in
Unefon."

Consent Solicitation Details

TV Azteca is soliciting consents from holders of its 10-1/8
percent Series A Guaranteed Senior Notes due in 2004 and its 10-
1/2 percent Series B Guaranteed Senior Notes due in 2007. In
addition, Azteca Holdings is soliciting consents from holders of
its 11 percent Senior Secured Notes due in 2002.

The consents will take the form of a one-time waiver that will
generally include amendments of the covenants on restricted
payments, asset dispositions, and transactions with affiliates.
The detailed terms and conditions of the consent solicitation are
contained in the Consent Solicitation Statements dated February
12, 2001. The Record Date for the consent solicitations is
January 18, 2001.

If the consents are received from a majority of the TV Azteca
Noteholders and a majority of the Azteca Holdings Noteholders and
the supplemental indentures effecting the amendments are
executed, TV Azteca will make a one- time cash payment equal to
two percent of the principal amount of the TV Azteca Notes (US$20
per US$1,000 principal amount) to each holder whose consent is
delivered prior to the expiration date. In a similar manner,
Azteca Holdings will make a one-time cash payment of 0.5 percent
of the principal amount of the Azteca Holding Notes (US$5 per
US$1,000 principal amount) to each holder whose consent is
delivered prior to the expiration date. These fees will be paid
promptly after the satisfaction or waiver of the conditions to
the consent solicitations.

The majority of Noteholders of each of the TV Azteca Notes and
Azteca Holdings Notes must give their consents for these
transactions to go forward. The consent solicitations may be
terminated or amended at any time prior to the expiration date,
and the expiration date may be extended at TV Azteca's and Azteca
Holdings' option. The consent solicitations expire at 5:00 pm
EST, on March 9, 2001.

TV Azteca Specific Details

TV Azteca will be required to make an offer to purchase 25
percent of the aggregate principal amount of the TV Azteca Notes
at a purchase price equal to 103 percent of the face amount if a
merger or consolidation of Unefon, a sale of all or substantially
all of Unefon's assets, or a sale of a majority of Unefon's
outstanding shares occurs if the Board of Directors otherwise
determines to accelerate the exercise date of the Rights, before
December 11, 2002. This offer to purchase will take place within
90 days of the closing of a Unefon sale.

If the exercise date (December 11, 2002) of the Unefon Rights is
not accelerated, any net proceeds that TV Azteca receives from
the exercise price of the Unefon rights will be applied in
accordance with the asset disposition covenant of the indenture
governing the TV Azteca Notes.

                                TV Azteca               TV Azteca

                    10-1/8% Notes due '04   10-1/2% Notes due '07
    Amount Issued
     & Outstanding        US$ 125 million         US$ 300 million

    Up front...
    Consent Fee                      2.0%                    2.0%
                         ($20 per $1,000)        ($20 per $1,000)
    If Unefon is sold
     prior to
     Dec. 11, 2002...
    Offer to Purchase              25% of                  25% of
                                 outstanding          outstanding
                                    amount                 amount

    Purchase price                   103%                    103%
Azteca Holdings Specific Details
In the event that Unefon Rights received by Azteca Holdings as a
shareholder of TV Azteca are exercised, the Unefon shares
received upon exercise of the Rights and the net sale proceeds
received from the sale of any such shares in connection with a
strategic sale of Unefon will become collateral for the
obligations under the Azteca Holdings Notes.

Azteca Holdings 11% Notes due '02

Amount Issued and Outstanding US$ 255 million
    Up front...
     Consent Fee                                             0.5%
                                                  ($5 per $1,000)
    If Unefon is sold
     prior to Dec 11, 2002...
     Additional
     Collateral                        100% of Unefon shares
                                       received by A.H. and 100%
                                       of any net sales proceeds
                                       from sale of any of those
                                       shares

XEROX: Takes 80 Percent MHV Capital
-----------------------------------
The crisis at Xerox's main office didn't stop its Brazilian
subsidiary from acquiring 80 percent of MHV capital, which
specializes in remote teaching. This was announced in a South
American Business Information report released Monday. MHV,
founded in 1994 by PUC-Rio, developed UniverSite, software for
teaching via Internet. Xerox do Brasil is said to be one of the
first users of the system for its training programs.




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 Janice Mendoza, Editors.

Copyright 2001.  All rights reserved.  ISSN 1529-2746.

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