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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, March 28, 2001, Vol. 2, Issue 61

                           Headlines




A R G E N T I N A

ANDRE GROUP: Looks To Sell Argentine Business, Asian Operations


B O L I V I A

COTEL: To Hold Elections For New Management Mid May


B R A Z I L

PARMALAT: To Close Down Facility In Itamonte
SPORTSYA!: Phases out Brazilian Site SportsJa
TRANSBRASIL: Struggles To Renegotiate Debts


C O L O M B I A

BANCAFE: Spain's BBVA Considers Purchase


E C U A D O R

EMELEC: Government To Deal With Debts


M E X I C O

CHRYSLER: Restructures Field Organization, Local Management
XEROX: Hit With A New Set Of Bias Charges, By Texas Employees


P A R A G U A Y

ACEPAR: Seeks 90-Day Suspension Of Operations To Fix Problems


V E N E Z U E L A

EDC: Gets Green Light On Plan To Split Business Activities
EDC: Suspends Payment Of Quarterly Dividends


     - - - - - - - - - -


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

ANDRE GROUP: Looks To Sell Argentine Business, Asian Operations
---------------------------------------------------------------
Andre Group, a leading grain trader currently seeking protection
from creditors, is looking to sell its Argentine business to
White Plains, New York-based Bunge International Ltd.  Andre
Chief Executive Friedrich Sauerlaender explained the company's
plans in a Financial Times report. Accordingly, the 124-year-old
family-owned business signed a cooperation agreement with Bunge,
the world's largest soybean trading company, which could lead to
the sale of the Andre Argentine soybean business.

In addition, the company is also looking to sell its operations
in 10 Asian countries, including China, Indonesia and Australia,
and is now in talks with its bankers regarding the possible sale,
Sauerlaender said. The latest moves are perceived as a stark
contrast the company's previously-announced plans to cut most of
the 180 jobs at its Lausanne headquarters but maintain operations
in Brazil, Argentina and Asia.

The company filed for court protection after failuring to reach
an agreement with creditors, which include UBS AG, after two
straight years of losses, totaling $494 million.



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B O L I V I A
=============

COTEL: To Hold Elections For New Management Mid May
---------------------------------------------------
Cotel, Bolivia's largest fixed line operator currently under
government intervention, will hold elections for new management
positions by mid May, according to South American Business
Information Monday. Over recent months, Cotel has managed to
reduce its debts of US$43 million to US$18 million by way of
restructuring and cost-reduction measures. The company had
planned to launch a second international tender to find a
strategic partner, however, the Bolivian government recently
decided against it after the so-called interested parties failed
to make an offer. Subsequently, the government also discarded its
second alternative involving an international tender offer for an
administrator to take over management of the company. Cotel is
widely believed to be in need of a financial backing of a foreign
investor to ensure its future solvency.



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

PARMALAT: To Close Down Facility In Itamonte
--------------------------------------------
Dairy products company Parmalat do Brasil decided to close down
its unit in Itamonte in Minas Gerais until late 2001, citing a
40-percent decrease in the production of milk in the region over
the last three months. In a South American Business Information
report released Monday, the company disclosed that the unit's
production would be transferred to other locations. As a result
of the shut down, 30 percent of the 275 employees will also be
transferred.

The company reported a negative operating result of R$61.168
million between January and September of last year, while its net
loss reached R$1.426 million compared to R$630 million registered
in the same quarter of 1999 because of restructuring costs.


SPORTSYA!: Phases out Brazilian Site SportsJa
---------------------------------------------
SportsYA! Media Group announced the closure of its Brazilian
SportsJa website and the dismissal of 32 employees after
operating for almost one year in the country, South American
Business Information said Monday. The company attributed the move
to the high operating costs, estimated to be US$10 million,
consumed by the Brazilian site. Like many similar companies, the
high "burn rate" leaves it in need of a new capital injection to
reach its break-even point. SportsYA!, which was rumored to be on
the brink of bankruptcy in February because of its financial
situation, recently closed its office in Argentina, laying off 30
employees. The company said that operations in Argentina,
launched in December 1999, were not profitable. Banner sales and
events did not reach the expected level.


TRANSBRASIL: Struggles To Renegotiate Debts
-------------------------------------------
Transbrasil, a Brazilian air transportation company, is said to
be in a struggle to renegotiate debts owed to pension fund Aerus
(Fondo de Pensao dos Aeroviarios), South American Business
Information reported Monday. Company employees were negotiating a
new installment of its obligations, which would be guaranteed by
its 15 percent ownership in the booking system, Amadeus.
Negotiations may be at risk because of management changes
announced by sponsor Varig. In early 1999, all the air
transportation companies, which sponsored Aerus, renegotiated
their debts.



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C O L O M B I A
===============

BANCAFE: Spain's BBVA Considers Purchase
----------------------------------------
Spanish bank Banco Bilbao Vizcaya Argentaria SA is contemplating
buying Colombia's largest state-owned bank, Bancafe, as it
strengthens its bank holding across the Latin American region,
Bloomberg reported Monday.

Bancafe, which the government originally scheduled to put on the
auction block in October, could be up for sale as early as May or
June, according to the president of BBVA's local unit BBVA-
Ganadero, Jose Maria Ayala.

"We will study it," Maria Ayala said, without giving details. "We
think Bancafe has some interesting aspects."

"Bancafe is much stronger than before with the money that's been
pumped into it," said Jaime Ospina, a banking analyst at Suvalor
SA brokerage in Medellin. "Still, any buyer of the bank would
still have to inject more money into it."

The government has put about 860 billion pesos (US$20 million)
into Bancafe in the last two years to increase its solvency,
although the bank's president, Pedro Nel Ospina, said recently
that Bancafe needed about 200 billion pesos more in fresh
capital. The bank has assets of 5.8 trillion pesos, but its
shareholders' equity is only 193 billion pesos giving little room
for large-scale loan operations.



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

EMELEC: Government To Deal With Debts
-------------------------------------
Debts held by the state owned electric power distributor Emelec
(Empresa Electrica del Ecuador) in the wholesale energy market
should be dealt with together with other debts from power
distribution companies. The Ecuadorian Ministry of Energy Pablo
Teran explained his agencies position on the matter in a South
American Business Information report published Monday. Emelec has
debts of US$120 million from energy purchases during the period
of March 1999 to November 2000. The company has been under
government intervention since March 2000. In December of 2000,
the Ecuadorian government concluded the intervention of
Superitendencia de Companias into Emelec. Early this month, the
Ecuadorian electric power council Conelec, which manages Emelec,
signed a contract with aconsortium teaming PricewaterhouseCoopers
- BBVA, Levin Interdin & Ahead to evaluate the assets of the
electric utility. Both will also model the privatization of
Emelec's assets.



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

CHRYSLER: Restructures Field Organization, Local Management
-----------------------------------------------------------

The Chrysler Group has restructured its field organization to
create five Regional Business Centers, with greater
responsibility for sales and service in each region. In doing so,
each Business Center is empowered to make decisions relative to
vehicle content, incentives and marketing in each respective
region.

"The market requirements for selling trucks in Texas is different
than in New York, so why should we try to apply a national sales
and marketing approach equally to both regions?" said Gary E.
Dilts, Chrysler Group Senior Vice President - Sales. "We'll give
the Regional Business Center management the resources necessary
to make the smart decisions to respond quickly to local market
demands.

"The five Regional Business Centers are located in Detroit, New
York, Orlando, Dallas and Los Angeles and will be responsible for
managing significant advertising, incentive, product and
distribution decisions. The Business Centers will be supported
locally with Finance, Legal, Marketing, Parts & Service, Fleet,
Customer Relations, Training and Warranty personnel.

"The 25 existing Chrysler Group zone offices will continue to
operate, but with a downsized staff. Some zone employees will be
re-deployed to the Regional Business Centers or moved into the
field to work more closely with dealers.

"The restructuring of our field organization is being done in an
effort to more directly service our dealers and their local
markets," said Dilts. "The resulting organization will be leaner,
faster and more responsive."


XEROX: Hit With A New Set Of Bias Charges, By Texas Employees
-------------------------------------------------------------

In the second wave of bias charges to hit the company within two
weeks, according to the lawyers representing them, a group of
African-American employees at Xerox Corporation's (NYSE: XRX)
Operations Division in Texas have filed charges of discrimination
with the U.S. Equal Employment Opportunity Commission.

Melvyn I. Weiss, one of the attorneys representing the Xerox
employees, said the charges claim a widespread and systemic
practice of disparate treatment with regard to their advancement
opportunities, assignments, salary and work environment. The
story was first reported in today's Wall Street Journal.

The Texas complaints follow closely those of 11 African-American
and Hispanic salespeople in New York who filed bias charges
against Xerox on March 14 with the EEOC District Office in New
York, on their own behalf and "on behalf of all minority
employees who are similarly situated."

By law, workers must file charges with the EEOC before commencing
an action in Federal Court. The EEOC is the federal agency
charged with enforcing Title VII of the Civil Rights Act of 1964,
which prohibits discrimination based on race, color, religion,
sex or national origin.

In both the Texas and New York filings, the Xerox employees are
represented jointly by Milberg Weiss Bershad Hynes & Lerach LLP (
http://www.milberg.com),the nation's largest class action  
litigation firm, and Leeds Morelli & Brown PC (
http://www.lmblaw.com),which specializes in employment  
discrimination law. Last October, the two firms announced they
had formed an affiliation to jointly litigate large-scale
employment discrimination cases.

The Xerox operations workers in Texas claim they have hit a
"concrete ceiling" with little or no success in seeking
opportunities for advancement and higher salaries. Many contend
that they have worked for the company for years training new
white operations employees for managerial positions and are left
at the back door of the company.

Several of the workers also contend that they were subjected to
racially derogatory jokes, which white co-workers compiled into a
booklet distributed throughout various departments at Xerox. One
racial joke, described fully in the affidavit of Gregory A.
Idlebird, an account associate in one of Xerox's Texas offices,
involved derogatory references to the alleged size of an African-
American male's genitals. "The African-American workers who heard
the jokes complained to management officials, but nothing was
done," Mr. Idlebird said.

The African-American workers in both Texas and New York contend
that they have attempted to address their concerns regarding the
discriminatory work environment with corporate officials through
Human Resources and management, but their complaints have been
ignored.

The new EEOC filings include Texas sales personnel in addition to
those on the operations side. "If Xerox fully embraced all of the
skills and experience that we have and bring to this company, we
could all be drinking from the well of prosperity," said Frank
Warren, a current employee in Xerox's New York sales division.

Echoing their sales colleagues in New York, African-American
sales people named in the Texas affidavits also allege that they
are assigned to what is called the "bench," with no sales
territories for longer time periods than white sales agents --
and then assigned to the less desirable and profitable sales
territories. The EEOC charges also alleged that the more
lucrative and well-established sales territories with higher
commissions are reserved for the young and often inexperienced
white sales agents.

Many of the African-American employees charge that Xerox, through
its discriminatory practices, has systematically set up and
perpetuates a "good ol' boys club" by selecting less experienced
whites for promotion to choice or managerial positions and then
requires that the African-American workers train them for their
positions. "We are tired of being locked out of the doors of
opportunity and privilege," claimed Dora Miller, a 20-year
salesperson in Xerox's Houston, Texas office. "It's like Xerox
has given us the keys to the house, but then changed all the
locks."

Lenard Leeds, a senior partner at Leeds Morelli & Brown, said
calls have been coming in every day to his firm and co-counsel
Milberg Weiss from Xerox workers all over the country. "The
number of complaints is growing daily," he said, "and we expect
to file quite a number of EEOC complaints on behalf of Xerox
employees, past and present, in the coming weeks."

Milberg Weiss and Leeds Morelli have set up a joint task force to
prosecute large-scale employment discrimination cases. Melvyn I.
Weiss, senior partner at Milberg Weiss, said, "The Xerox
situation confirms my judgment that, with the growth in size of
American corporations -- Xerox had 94,600 employees at last count
-- employment discrimination cases would increasingly assume the
scale of the complex litigation that is our firm's specialty."

"There seems to be a widespread belief among African-American
workers at Xerox," Mr. Weiss added, "that they are not on an
equal footing with white workers and in fact face a company-wide
pattern and practice of systemic discriminatory treatment."



===============
P A R A G U A Y
===============

ACEPAR: Seeks 90-Day Suspension Of Operations To Fix Problems
-------------------------------------------------------------
The management of state-owned steelmaker Aceros del Paraguay SA
(Acepar) is seeking a 90-day suspension of operations from the
government as it finds a way on how to resolve financial problems
brought about by smuggling, tax evasion and import controls,
South American Business Information said Monday. These problems
are preventing Acepar from exporting products to Latin American
countries. Rather than close down the company entirely, these
efforts are designed to keep it afloat. In January 1998, the
Paraguayan government sold the company to the private Cosipar
consortium - composed of metallurgical suppliers and former
employees - for $35 million.



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

EDC: Gets Green Light On Plan To Split Business Activities
----------------------------------------------------------
Shareholders of AES Corp's. Venezuelan unit, Electricidad de
Caracas, approved a plan to separate its business activities to
comply with legislation designed to foster competition in the
electricity sector, Reuters said Monday. The new business model,
which still requires approval from the Energy and Mines Ministry,
focuses on the creation of one or more subsidiaries for each of
the company's generation, transmission, distribution and
marketing departments. Electricidad, under the terms of the
Electrical Service Law, has until September 21 to split its
activities.

Additionally, company shareholders gave its go ahead signal on a
bond issue for up to $400 million in foreign markets with a
maturity of up to 15 years to raise funds to improve its
electricity network and restructure short-term debt. They also
approved two debt issues of up to 60 billion bolivars each,
either in local or foreign currency: one short-term placement of
up to 360 days to finance working capital requirements; the other
with no fixed maturity. Management also won approval to annul
531,093,585 Electricidad shares repurchased by the company under
earlier buyback plans and currently held in treasury. As a result
the company's paid-in capital will fall to 312.4 billion bolivars
from 365.5 billion bolivars.


EDC: Suspends Payment Of Quarterly Dividends
--------------------------------------------
Contrary to expectations, the Venezuelan electricity company
Electricidad de Caracas (EDC) told shareholders that it had
suspended payment of quarterly dividends following negative
results it posted last year, Reuters reported Monday. The
company, which posted a net loss of 78 billion bolivars (US$111
million) in 2000 compared with a 92 billion bolivar (US$131
million) net profit in 1999, has seen its stock rise in recent
days on expectations it would announce a generous share dividend.

"The company is in a transition phase and once this has
stabilized we will look at dividend policy again," said Juan
Azpurua, head of EDC's institutional relations. Azpurua said the
company could call an extraordinary shareholders' meeting in June
to approve a dividend.

The company's loss in 2000 was primarily caused by redundancy
costs and expenses associated with the previous management's
unsuccessful defense against the AES takeover bid. AES Corp., the
largest U.S. power plant developer, took control of the
Venezuelan company in June in a $1.6 billion hostile takeover
bid.




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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