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                   L A T I N   A M E R I C A

            Monday, March 17, 2001, Vol. 2, Issue 54

                           Headlines



A R G E N T I N A

AEROLINEAS ARGENTINAS: Union Ordered To Suspend Planned Strike
OMEGA SEGUROS: Seeks Compulsory Liquidation


B R A Z I L

CVRD: CVM Approves Unwinding Of Cross Shareholding With CSN
KLABIN: To Restructure Debts This Year


M E X I C O

BANCRECER: Six Institutions Eye Acquisition
GREASE MONKEY: Mexican Franchises In Crisis
GRUPO BITAL: Implements Staff-Reduction Program
AGRIEXPORT GROUP: Serfin Demands Repayment, Launches Action
XEROX: Employees File Charges On Basis Of Racial Discrimination


V E N E Z U E L A

ELECENTRO: Partners Call In Government Intervention
FIAT: Family Car Program Healthier After Plan Closure


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A R G E N T I N A
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AEROLINEAS ARGENTINAS: Union Ordered To Suspend Planned Strike
--------------------------------------------------------------
The Argentine Labor Ministry issued an order to end a work
stoppage planned by an Aerolineas Argentinas labor union, Agencia
EFE reported Wednesday. The Aeronautic Personnel Association
(APA), formed by administrative employees, was forced to suspend
a planned two-hour strike because of the so-called "mandatory
reconciliation" ordered by the ministry. APA said in a statement
that the strike was organized to rally against a restructuring
plan implemented by Spain's SEPI, the largest shareholder in
Aerolineas Argentinas and its subsidiary, Austral airlines.
Accordingly, the plan will see the reduction in the dimension of
the two companies and the loss of market share, as much in short
flights as in international ones. Aerolineas Argentinas and
Austral Airlines are facing serious financial problems, with
losses totaling more than $20 million per month and debts close
to $1 billion.


OMEGA SEGUROS: Seeks Compulsory Liquidation
-------------------------------------------
The Argentine insurance firm Omega Seguros decided to ask for its
compulsory liquidation after an unsuccessful sell-off to the
insurance company Lua La Portena, according to a South American
Business Information report Thursday edition. Among those who
will probably be affected, are the third parties, who have court
cases against the company, as the firm's assets are not enough to
pay these cases. However, shareholders will not be affected by
the decision. According to the Superintendency of Insurance, in
the vehicle area, Omega was in the sixth place with a 5.11
percent market share, according to production level.



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B R A Z I L
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CVRD: CVM Approves Unwinding Of Cross Shareholding With CSN
-----------------------------------------------------------
Companhia Vale do Rio Doce (NYSE: RIO)("CVRD") announces that, in
line with its strategy of concentrating its business interest on
mining and logistics, in view of the unwinding of the cross
shareholding with Companhia Siderurgica Nacional ("CSN") carried
out today, has decided to sell its stake in CSN.

As of August 23, 2000, CVRD has already informed the market that
its Board of Directors has decided to authorize the sale of its
CSN stake immediately after the unwinding of the cross
shareholding.

Since 1993, CVRD has held preemptive rights to the purchase or
lease of the Casa de Pedra mine, owned by CSN, as well as to the
marketing or acquisition of the surplus iron ore extracted there
and not used in the production of steel by CSN, such rights being
guaranteed by a shareholders agreement of CSN, of which CVRD was
one of the signatories.

On the other hand, as announced to the market on August 4, 2000,
CVRD has a debt with Fundacao Vale do Rio Doce de Seguridade
Social -- VALIA, its employee pension fund, derived from an
actuarial deficit existing at the implementation of a new benefit
plan. This procedure was duly authorized by the Brazilian
Securities Commission ("CVM").

The unwinding of the cross shareholding has given CVRD an
opportunity to solve both questions referred to above, as
follows:

(i)  It has signed a contract with CSN which guarantees, for a
period of 30 (thirty) years, to CVRD preemptive rights referred
to:  (a) purchase of any iron ore surplus produced by the Casa de
Pedra mine; (b) leasing and acquisition of the Casa de Pedra
mine; (c) development of a pelletizing plant supplied by iron ore
produced by the Casa de Pedra  mine, if CSN would want to joint
venture with third parties.  On the other hand, CSN has been
guaranteed a right of preference in building, in conjunction with
CVRD, any greenfield steel making project, which CVRD decides to
set up under its own control over the next 5 (five) years:

(ii) It has sold to VALIA its CSN stake, 10.33% of CSN total
capital, represented  by 7,410,456,996 common shares (that will
not have the right to participate in CSN shareholders agreement).  
These shares were valued at approximately R$ 520 million, R$
70.22 per lot of 1000 shares, based on the weighted average price
of the last 30 (thirty) trading sessions at BOVESPA in the period
ended on March 9, 2001.  This transaction provides  a gain to
CVRD, eliminates VALIA's actuarial deficit and the associated
CVRD debt and increases CVRD borrowing capacity.


KLABIN: To Restructure Debts This Year
--------------------------------------
Brazilian paper and woodpulp producer Industrias Klabin de Papel
e Celulose announced plans to restructure this year. The
company's debts total an estimated amount of R$2.475 billion in
December, South American Business Information reported Thursday.
Klabin recently reported R$13.7 million in net profits for the
year 2000, reversing a loss of R$116.46 million in 1999. The
company posted a 9-percent increase in sales totaling 1.5 million
m tons. Additionally, the company expects to issue R$70 million
in debentures and the resources to conclude the payment of
Igaras.



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M E X I C O
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BANCRECER: Six Institutions Eye Acquisition
-------------------------------------------
Carlos Septien, a top executive at Grupo Financiero Bancrecer,
says six firms are contemplating acquisition of the government-
intervened institution, Reforma/Infolatina said Thursday. Septien
refused to name the interested companies, however, he the group
is comprised of two European, two Mexican and two U.S.
institutions. Mexico's Grupo Financiero Banorte and Canadian-
owned Scotiabank-Inverlat have already expressed publicly their
interest in Bancrecer. According to Septien, Bancrecer is
currently valued at approximately $400 million. IPAB, the Mexican
bank bailout agency, is putting it up for sale soon.


GREASE MONKEY: Mexican Franchises In Crisis
-------------------------------------------
Denver, Colorado-based Grease Monkey, a chain of express auto
repair shops, is reportededly filed for bankruptcy protection
from creditors in the United States, Reforma/Infolatina reported
Thursday. The company sites financial troubles at its franchises
in Mexico as a contributing factor to its condition. Grease
Monkey first established business in Mexico in 1993. Currently,
it is operating 22 auto repair shops throughout the country,
predominantly located in northern cities such as Saltillo,
Monterrey, Hermosillo and Chihuahua. In addition, the franchise
has repair shops in San Luis Potosi, Aguascalientes, Guadalajara,
Queretaro and Mexico City.


GRUPO BITAL: Implements Staff-Reduction Program
-----------------------------------------------
Financially-strapped Mexican bank Grupo Financiero Bital has
launched a staff-reduction program that will likely cutback  
between 30 to 40 percent of its workforce, Reforma/Infolatina
reported Thursday. Bital is laying off employees and then
rehiring them on the condition that they give up certain benefits
and seniority. The implementation of the program is considered to
be an essential element of the group's ongoing efforts to bolster
its financial situation. Bital, which currently employs 7,000
workers, urgently needs an estimated fresh capital injection of
US$600 million.


AGRIEXPORT GROUP: Serfin Demands Repayment, Launches Action
-----------------------------------------------------------
Agro Industrial Exportadora's (Agriexport) failure to repay
US$3.3 million in loans, including money lent to its subsidiaries
Pepinex, Vegemex and Productos Citricos Internacionales has
prompted Mexican bank Serfin to file legal action against them,
South American Business Information reported Thursday. The loans
were reportedly taken out by Pepinex and Vegemex and guaranteed
by Agriexport and Productos Citricos Internacionales. Agriexport
has been Serfin's client for more than 10 years. Its attempt to
renew credit with Serfin in August 2000 proved to be unsuccessful
when the bank replied in October 2000 demanding repayment of
existing loans as soon as possible. Since then, the bank has
refused to grant further credit with the group.

Serfin was acquired by Santander Mexicano, a subsidiary of Banco
Santander Central Hispano (BSCH), from Mexican bank bailout
agency IPAB in May last year.  


XEROX: Employees File Charges On Basis Of Racial Discrimination
---------------------------------------------------------------
Eighteen former and current employees of the struggling copier
maker Xerox Corp. are filing charges with the U.S. Equal
Employment Opportunity Commission, claiming white managers
discriminated against them based on race, AP Online reported
Thursday. The employees, including African American and Hispanic
sales representatives, said that white managers routinely
excluded them from opportunities to earn higher commissions and
to advance within the company. According to a Xerox spokeswoman,
the company has a strict policy prohibiting discrimination and
was looking into the claims. In addition, the workers are
planning to bring private lawsuits against the company, possibly
seeking class-action status. Xerox Corp. is also facing several
lawsuits alleging it for issuing false and misleading statements
concerning the company's financial condition.



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

ELECENTRO: Partners Call In Government Intervention
-----------------------------------------------------
Elecentro partners, who are also employees of the Venezuelan
savings bank, requested government intervention and an
independent audit on the operation, South American Business
Information reported Thursday. The request came after discovering
a lack of liquidity and alleged mishandling of assets by the
board. Their interests were heightened in the case of the La
Blanquera residential development in Aragua, Venezuela, which the
bank promoted. Elecentro employees are questioning practices such
as paying construction company Corporacion Olivero (Corpoca) part
of a Bs$780 million housing development contract with plots of
land at the site.


FIAT: Family Car Program Healthier After Plan Closure
-----------------------------------------------------
A few months after Fiat closed its La Victoria plant in
Venezuela, it launched its family car program in the Caribbean
nation, according to a South American Business Information report
released Thursday. Some experts believe that this strategy
backfired badly on the Italian carmaker, however, the firm cites
growing market share to disprove the charge. Fiat says, before
the La Vicotria plant closure, its local distributor
Commercializadora Todeschini, enjoyed only a 6.8 percent market
share. Subsequently, the company saw an increase to 10 percent
market share in 2000. Todeschini posted a turnover of US$100 mil
in 2000 (2 percent of which will be spent on advertising). The
results represent growth of 115 percent compared to overall
market growth of 30 percent. Todeschini aims to post growth of 30
percent in 2001 and raise its market share to 13 percent. The
threat of higher duties aimed at limiting sales of cars not
assembled in Venezuela is not not viewed as much concerned to the
company.

Fiat says its results in South America have improved during 2000
because of recovery in demand in Brazil and a restructuring of
the Argentine industrial operations, which allowed a significant
reduction in losses in the region compared to 1999. During the
fourth quarter in the year 2000, Fiat Auto posted an operating
profit of 66 million euros, equal to 1 pct of sales.




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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