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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

         Monday, February 26, 2001, Vol. 2, Issue 39

                           Headlines



B R A Z I L

ALPARGATAS: To Convert Tucuman Textile Plant; To Cut Jobs
BAQUIA: Quits Brazilian Operations
CAEMI: BHP Open To Working With CVRD
CSN: Bradespar And Previ To Acquire Valepar Stocks
CVRD: Suzano Buys Remaining 50-Percent Of Bahia Sul
iG: Telemar Acquires Data Center For $20M
SASSE: Federal Court Issues Injunction Suspending Acquisition


M E X I C O

BUFETE INDUSTRIAL: Bolanos Close To Acquiring Construction Firm
VITRO: To Cut Investments In 2000 By $50M
XEROX: The Law Office of Mark McNair Files Class Action Lawsuit


P E R U

BANCO WIESE: Secures Position For Increased Loan Demand in `02


V E N E Z U E L A

MAVESA: Announces First-Quarter Fiscal 2001 Results


     - - - - - - - - - -


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

ALPARGATAS: To Convert Tucuman Textile Plant; To Cut Jobs
---------------------------------------------------------
Brazilian sportswear company Alpargatas, which completed
financial restructuring a couple of months ago, plans to convert
its textile plant in Tucuman province, Latin Trade reported
Thursday. As a result, the current 2000-employee payroll will be
cut. Exactly how many will be dismissed is not yet knowon as the
measure is yet to be analyzed by government representatives as
well as by Julio Miranda, Governor of Tucuman.

Meanwhile, Tucuman's Minister of Production, Rafael Bulacio,
confirmed that the National Bank of Argentina would grant credit
to the affected provinces to carry out acquisitions from the
company, reactivating its production. Under Bulacio's plan,
interest free credit would be extended for a term of 24 to 30
months with a grace period of one year.

Alpargatas posted net profits of R$66.871 million for the year
2000. Net turnover totaled R$742.315 million, while net assets
stood at R$401.384 million.


BAQUIA: Quits Brazilian Operations
----------------------------------
Madrid-based Internet news provider Baquia informed that it has
shut down its Brazilian office, according to a report in Business
News Americas Thursday. Spanish VC firm Netjuice, Baquia backer,
sees the move as part of its restructuring process to cut costs.
Just last month, the news provider also closed its doors in Miami
and reduced its presence in Buenos Aires, Argentina to a minimum.
Baquia will continue to operate out of Madrid, covering the
Internet markets of Spain, Latin America and the U.S.


CAEMI: BHP Open To Working With CVRD
------------------------------------
Australia's BHP Ltd. last week said that it is open to the idea
of working with CVRD to win a major stake in Brazil's Caemi
Mineracao e Metalurgia SA (Caemi), according to Reuters. The  
comments came after Mitsui was reportedly contemplating an offer
that would match BHP's for the 20 percent stake in Caemi and
creating a broader partnership with both BHP and CVRD in the
company. According to BHP, it would not mind if Caemi's 40
percent shareholder, Mitsui & Co Ltd. decided to exercise its
right to match the offer and then draw both CVRD and BHP in as
partners.

"We clearly have a preference for working with the right partners
to achieve the best outcome, for example Mitsubishi in QCT," said
BHP spokeswoman Mandy Frostick, referring to BHP's joint venture
with Mitsubishi Corp to take over QCT Resources Ltd. last year.

BHP recently outbid CVRD, the world's biggest iron ore miner,
with a US$332-million offer to buy the 20 percent equity interest
in Caemi held by brothers Mario and Guilherme Frering.


CSN: Bradespar And Previ To Acquire Valepar Stocks
--------------------------------------------------
Bradespar and Previ, the pension fund, will acquire the equity of
Companhia Siderurgica Nacional (CSN) in CVRD-controlled Valepar,
South American Business Information said Wednesday. The move
comes after Valepar's minority shareholders decided against
exercising their right of first refusal to acquire the position.
Opportunity, the most important factor among the minority
stockholders, apparently did not justify the asking price.

CVRD: Suzano Buys Remaining 50-Percent Of Bahia Sul
---------------------------------------------------
Companhia Vale Do Rio Doce (CVRD), the world's no. 1 iron ore
miner, sold its pulp and paper unit Bahia Sul to Companhia Suzano
de Papel e Celulose for an amount of $320 million. This was
announced in a Reuters report published Thursday. Suzano already
held 50-percent of the common shares in Bahia Sul. Its recent
acquisition of the remaining 50 percent of the company's common
shares sees it taking hold of Bahia Sul's entire voting capital.
Suzano also acquires 19.94 percent of the preferential shares in
the company.

"It is CVRD's first step in the retreat from the pulp and paper
sector," president of CVRD board Roger Agnelli told reporters
after the deal was announced.

Bahia Sul is one of the four pulp and paper companies that CVRD
is selling. It makes 600,000 metric tons of pulp and 225,000
metric tons of paper a year, while Suzano makes 400,000 metric
tons of pulp and 525,000 metric tons of paper. The other three
companies, which CVRD wants to sell, are Celmar, Cenibra and
Floresta Rio Doce.


iG: Telemar Acquires Data Center For $20M
------------------------------------------
Brazil's fixed-line telephone operator Telemar acquired free
World Wide Web services provider iG's Internet data center for 40
million reais ($20 million). In a Reuters report Wednesday,
Telemar president Manoel Horacio da Silva said in a meeting of
analysts that iG can still continue using the center, however, it
would have to pay an annual rent of 3 million reais. The data
center is a set of computer servers allowing access to the Web.
Its extra capacity would allow third parties to use the
infrastructure.


SASSE: Federal Court Issues Injunction Suspending Acquisition
-------------------------------------------------------------
The tender of a 50.75 percent stake in Caixa Seguros (Sasse), an
insurance company owned by CEF (Caixa Economica Federal), was
null and void, according to a South American Business Information
report Thursday. The Brazilian Regional Federal Court issued a
ruling suspending the acquisition by France's CNP Assurances,
which acquired the stake in a transaction valued at R$1.065
billion. The court's decision comes after legal action by a bank
workers trade union, which argued that the sale was a form of
hidden privatization and that the firm's employees had not
approved the deal.

Funcef (pension fund of Caixa Economica Federal), which sold the
stake to the French group, is expected to appeal to the ruling.



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

BUFETE INDUSTRIAL: Bolanos Close To Acquiring Construction Firm
---------------------------------------------------------------
Negotiations between struggling Mexican construction firm Bufete
Industrial and Grupo Serbo's Sergio Bolanos Quesada will likely
be concluded in late March or early April. The two firms are now
conducting the final stages of due diligence and other pre-
acquisition audit procedures. News of the progress was announced
in an El Economista/Infolatina report Thursday. The deal will see
Bolanos taking a 60-percent stake in the construction firm. He is
expected to inject 400 million dollars in cash into the heavily
indebted firm.

VITRO: To Cut Investments In 2000 By $50M
-----------------------------------------
Mexican glassmaker Vitro disclosed plans to cut investments in
2001 by as mush as $50 million but it didn't cite reasons for
planning such action, Reuters related Thursday.

"In terms of our current businesses we are reducing investment
from $160-$170 million last year, to between $120-$130 million,"
Vitro Chief Financial Officer Jose Manuel Contreras told analysts
during a conference call.

However, investment could still rise if the company discovers new
business opportunities in 2001, the CFO added.


XEROX: The Law Office of Mark McNair Files Class Action Lawsuit
---------------------------------------------------------------
The Law Office of Mark McNair announced that it has filed class
action lawsuit against Xerox Corporation.

The Law Offices of Mark McNair specializes in representing
individual investors with significant losses and institutions in
securities class action cases.

Xerox Corporation (NYSE: XRX)

Class Period: February. 15, 1998 to February 6, 2001

The complaint alleges that Xerox and several of its top officers
reported false financial results during the class period, failing
to adhere to the standard accounting practices the company
claimed to follow. Xerox issued a statement about the
"irregularities" in Mexico on June 16, 2000, falsely portraying
them as an aberration perpetrated by rogue executives. But on
February 6, 2001, a Wall Street Journal article reported
allegations of accounting fraud that went far beyond Mexico.
Meanwhile, Xerox shares fell from as high as $124 a share during
the Class Period to just $4.43 a share. The company's accounting
practices are now the subject of a Securities and Exchange
Commission investigation.



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P E R U
=======

BANCO WIESE: Secures Position For Increased Loan Demand in `02
--------------------------------------------------------------
Banco Wiese Sudameris is said to be preparing for an expected
pick up in load demand in 2002, according to Peruvian banking
analysts in a Business News Americas article published Thursday.
Orlando River, head of research at local brokerage Interfip
Bolsa, related that the bank still has several issues that need
to be confronted in the first half of this year. Still struggling
from last year's merger with Banco Lima Sudameris, Banco Wiese
must first resolve its deteriorating profitability, efficiency
and non-performing loan portfolio. Paola Recavarren from local
brokerage Credibolsa suggested most of the current problems were
brought about by lack of integrating technology platforms and
differing management techniques.

Wiese Sudameris expects to take last year's US$10.6 million net
profit up to US$20 million this year, a manager from the bank
told local press. But analysts at Santander Investment Peru and
Interfip Bolsa believe that forecast is overly optimistic in
light of the adverse economic backdrop.

"Being optimistic they could post around US$15 million,"
Santander's Manuel Salazar said. "I'm more conservative than they
(Wiese Sudameris) are," Interfip's Rivera said, placing his
target on a year-end net profit of US$16 million this year.



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V E N E Z U E L A
=================

MAVESA: Announces First-Quarter Fiscal 2001 Results
---------------------------------------------------
Mavesa, S.A., a leading manufacturer, marketer and distributor of
branded consumer goods in Venezuela, announced today results for
the first quarter, ended January 31, 2001, of its fiscal year
2001. These results are expressed in U.S. dollars and in
accordance with U.S. Generally Accepted Accounting Principles
(U.S. GAAP). Information in constant and historical Bolivars
under Venezuelan GAAP is available upon request.

Commenting on the Company's first quarter results, Alberto Tovar,
Mavesa's Chief Executive Officer, said, "Our strong operating
results which continued to improve during the first quarter, show
that through difficult times, and with current economic
conditions easing slightly, Mavesa consistently delivers on its
strategy of improving performance and growth in targeted areas."

First Quarter Financial Results

Mavesa's net income totaled $11.5 million for the first quarter
of fiscal year 2001, or $0.193 per ADR, a significant increase
compared with $6.5 million, or $0.104 per ADR, for the year-ago
period.

Unit sales volume for the first quarter of fiscal 2001 decreased
by 4.5% to 53,853 tons from 56,369 tons for the fiscal year-ago
quarter. During the fourth quarter of fiscal 2000 Mavesa sold its
spring water business, which was a strong contributor to unit
sales volume in the Company's product portfolio. The unfavorable
comparison to 2001 first quarter is due to the inclusion of
spring water in the volume results for the 2000 period. With
spring water deducted from the year 2000, unit sales would have
increased by 4.2% from 51,688 tons.

Mavesa's net sales increased 5.7% from the year-ago first quarter
to $110.2 million from $104.3 million mainly due to a 10.5%
increase in the average price per kilo from a year ago. Excluding
spring water from the year 2000 period, net sales would have
increased by 7.2% from $102.8 million in the year 2000 first
quarter, and price per kilo would have increased by 2.9%.

Cost of sales decreased by 4.7% during the first fiscal quarter,
totaling $63.7 million, compared with $66.8 million for the same
quarter of last year, due to: (i) a decline in volume due to the
spring water effect, (ii) the decline in the company's main oil-
based raw materials cost, and (iii) a reduction in some products'
packaging materials. In keeping with this reduction, cost of
sales as a percentage of net sales decreased to 57.8% for the
first quarter of 2001 from 64.0% for the year-ago period.

Mavesa's overall gross income increased 23.8% to $46.5 million
for the first quarter of 2001 from $37.6 million for the year-ago
period, and gross margin as a percentage of net sales
substantially improved to 42.2% from 36.0%.

Year over year selling, general and administrative (SG&A)
expenses increased 3.7% to $29.2 million for the first quarter of
fiscal year 2001 from $28.2 million for the first quarter of
fiscal 2000, mainly because of higher advertising and promotional
expenses were not completely offset by reductions in
administrative and general expenses and in other tax
contributions.

However, quarter over quarter SG&A decreased 12.0% from the $33.2
million reported for the fourth quarter of 2000, due to a
reduction in advertising and promotion expenses during December
2000 and January 2001 as well as lower selling expenses.

Mainly as a result of higher net sales and lower costs operating
income substantially increased by 83.6% to $17.3 million from
$9.4 million for the year-ago period, and operating margin
improved to 15.7% from 9.0%. Mavesa's strong cash generation
trend continued with an increased EBITDA (earnings before
interest, tax, depreciation and amortization) of $20.9 million,
for the first quarter of fiscal 2001, or 19.0% of net sales, from
$15.3 million, or 14.6% of net sales, for the year-ago period.

Interest expenses, net of first quarter of fiscal 2001 decreased
to $2.2 million, from $2.9 million for the first quarter of
fiscal 2000, mainly due to the reduction of the Company's debt
and reductions of interest rates in Venezuela since the first
quarter of fiscal 2000. Mavesa's average lending rate in local
currency for the first quarter of fiscal 2001 was 17.4%, compared
with 21.8% reported for the year-ago quarter.

Mavesa reported an excess of $45.6 million in cash over debt as
of January 31, 2001 -- compared with an excess of $13.0 million
in cash over debt position (bank loans plus long-term debt minus
cash minus short-term and long-term investments) as of January
31, 2000.

The Company maintains a long dollar position. At January 31,
2001, it totaled $73.2 million, compared with the $38.8 million
of a year ago.

Mavesa recognized an exchange gain of $0.5 million for the first
quarter of fiscal 2001, compared with $1.4 million for the same
period last year. Even though the company's net monetary
liabilities position in local currency increased to $45.2 million
at January 31, 2001, compared to $42.3 million at January 31,
2000, the depreciation of the local currency was significantly
lower during this quarter than the first quarter of fiscal 2000,
-- 1.1% compared to 3.8%.

Allocations for income tax reserves totaled $4.1 million for the
first quarter of fiscal 2001, compared with $1.5 million for the
fiscal 2000 first quarter. This increase is mainly related to the
higher pretax income recorded in first quarter of year 2001.

As previously announced and in accordance with the Company's
growth strategy Mavesa completed the acquisition of Alimar, a
leading frozen seafood product's company in Venezuela, in late
January 2001. This acquisition was for a total cash value of
$10.6 million.

Operating Highlights

Spreads

Mavesa's Spreads Unit, which includes such products as margarine,
cheese spread and fruit preserves, reported a 1.5% increase in
net sales to $35.7 million for the first quarter of fiscal 2001
from $35.2 million for fiscal 2000. Unit sales increased by 1.2%
to 14,666 tons from 14,489 tons for first quarter of fiscal 2000,
with cheese spread volume growth of 22%.

Sauces

The Sauces Unit, which includes mayonnaise, ketchup, vinegar,
tomato-based products and other sauces, reported a 7.8% increase
in net sales to $25.6 million for fiscal 2001 from $23.7 million
for fiscal 2000. Unit sales significantly increased by 10.5% to
12,280 tons in 2001 from 11,118 tons in 2000. Mayonnaise and
ketchup showed strong performance with volume growth of 21% and
14% respectively, partially offset by a decline in vinegar
volume.

Seafood Products

Mavesa's Seafood Products Unit, which includes canned tuna,
sardines, other canned seafood products and frozen seafood
products (since January 2001) reported a 20.4% increase in net
sales to $17.1 million in the first quarter of fiscal 2001 from
$14.2 million a year ago.

Unit sales grew 3.8% to 6,430 tons from 6,195 tons for the same
quarter of fiscal 2000, mainly due to a 5% growth in tuna
volumes, despite a reduction of around the same percentage in
sardines.

Beverages

Mavesa's Beverages Unit, which includes fruit-based drinks and
powdered chocolate mixes, reported a 8.1% increase in net sales
to $10.6 million for the first quarter of fiscal 2001 from $9.8
million for last year's first quarter. Unit sales declined by
37.5% to 5,590 tons from 8,942 tons, mainly due the absence of
the spring-water volume in 2001. Excluding spring water from the
2000 first quarter comparisons would produce the following
results: 29.3% increase in net sales from $8.2 million, and 31.3%
growth in volume from 4,255 tons in 2000, mainly due to the
growth of fruit juice sales.

Cleaning Products

The Cleaning Products Unit, which includes laundry soaps,
dishwashing products, laundry detergents and laundry softeners,
recorded a net sales increase of 5.7% to $18.3 million for the
first quarter of fiscal 2001 from $17.3 million for the same
quarter of fiscal 2000. Unit sales volume decreased slightly by
1.1% to 13,429 tons from 13,573 tons, mainly as a result of a
decline in some of the Company's industrial products such as
glycerin and others, despite growth in other categories of this
business unit.

Exports

Exports by Mavesa during the first quarter of fiscal year 2001
totaled $2.5 million -- a 22.1% decrease from last year's $3.2
million, mainly due to the negative impact of Venezuela's
overvalued currency. During the first quarter of 2000, Mavesa's
exports to other Andean countries contributed 94% to the
company's total exports.

Shareholders' Meeting

As previously announced, shareholders at the annual meeting on
February 16, 2001, approved the Company's financial statements
for fiscal year 2000 and the distribution of a cash dividend of
Bolivars 6,224 million (equivalent to US $8.8 million at the
exchange rate of Bs. 703.50 as of February 16, 2001). The
dividend is equal to Bs. 103.8 per ADR, or approximately $14.76
per 100 ADRs, to be paid in four quarterly installments equal to
Bs. 25.95 per ADR, or approximately $3.6890 per 100 ADRs. The
amounts in US dollars may change depending on the official
exchange rate of the payment date.

The first of these quarterly installments for fiscal year 2000
will be paid March 2, 2001 to shareholders of record as of
February 21, 2001. Subsequent payments will be announced during
the year.



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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