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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, May 2, 2001, Vol. 2, Issue 86

                           Headlines


A R G E N T I N A

AEROLINEAS ARGENTINAS: Ongoing Strike Costing SEPI $3M Per Day


B R A Z I L

BANESPA: Dismissal Program To Be Outlined During The Year
CESP: Seeks CVM's Approval To Issue Debentures
CVRD: To Net US$1B From Sale Of Four Woodpulp And Paper Assets
GOODYEAR: Focuses Aircraft Tire Production In Brazil


C H I L E

COMPANIA MINERA: Andacollo Mine Begins Formal Liquidation


C O L O M B I A

BAVARIA: Trading Suspended At Three Stock Exchanges



M E X I C O

BANCRECER: IPAB Invalidates Dresdner's, Allianz's Claim
CORPORACION GEO: Employees Buy Shares, Fend Off Takeover
GRUPO AZUCARERO: To Submit New Debt-Restructuring Proposal
GRUPO DINA: Denies Receiving Buy-Out Offer From Volvo
GIDUSA: Shuts Down Plant Due To High Production Costs
GRUPO BITAL: To Go Be Auctioned Soon
TELEVISA: Esmas.com Looks Set To Conquer U.S. Hispanic Market
TELEVISA: Needs New Strategy To Stave Off Declining Sales


V E N E Z U E L A

SIVENSA: IBH Says Banks Called In Orinoco Loans


    - - - - - - - - - - -


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

AEROLINEAS ARGENTINAS: Ongoing Strike Costing SEPI $3M Per Day
--------------------------------------------------------------
The ongoing strike at Argentine airline Aerolineas Argentinas, is
costing SEPI approximately $3 million (some Pta600m) per day,
according to sources from the airline, El Pais-Spain reported
Monday. Spanish state industrial holding company SEPI is
Aerolineas' major shareholder with 85 percent of the company. The
conflict, sparked by SEPI's decision to lay off 222 employees,
left hundreds of passengers stranded in Buenos Aires. The
strike's prolongation is due chiefly to the fact that neither of
the parties involved has given way. SEPI has flatly denied it is
considering reinstating the sacked workers while the airline says
giving in to the metalworkers' trade union would be too big of a
step in the restructuring plan the Spanish state company has
drawn up to re-float the Argentine company.

Meanwhile, the CGT union, along with Spanish unions UGT and CCOO,
are seeking a meeting with top officials from the government of
Spanish Prime Minister Jose Maria Aznar in an effort to find a
solution to the situation at Aerolineas Argentinas SA and
Austral. In a statement, the union said CGT official Rodolfo Daer
and the secretary general of the APTA maintenance crew union,
Ricardo Cirielli, will travel to Spain.



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B R A Z I L
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BANESPA: Dismissal Program To Be Outlined During The Year
---------------------------------------------------------
Banco Santander announced that the voluntary dismissal program
PDV (Programa de Desligamento Voluntario) to be adopted for the
employees of Banespa will be outlined throughout the year and not
at one time, South American Business Information reported Monday.
According to Sindicato dos Bancarios de Sao Paulo CEO, Mr Joao
Vaccari, the adhesion of 8,200 employees to the program has
surpassed Santander's expectations. On Monday, TCR-LA reported
that some 8,200 staff, or 37 percent, out of a total 22,000
working at Banespa accepted its redundancy program. The voluntary
redundancy package offers staff three to eight months of
severance pay depending on how long they have been with
Banespa. Additionally, the bank will pay for medical assistance
for a year following an employee's seperation from the bank.


CESP: Seeks CVM's Approval To Issue Debentures
----------------------------------------------
CESP Parana, Sao Paulo state's electricity generator, is seeking
CVM's (Comissao de Valores Mobiliarios) approval for the issuance
of debentures worth R$230 million, South American Business
Information reported Monday. The new funding resources reportedly
will be destinated to acquire three turbines for the facility
Engenheiro Sergio Mota (ex - Porto Primavera). Cesp Parana is
slated for privatization on May 16 with a minimum price set at
1.74 billion reais ($770 million), or 48 reais per share. Cesp
has a weighty debt portfolio, which partially dampened interest
in the first auction in December. However, its debt picture has
been improved by a reduction in exposure to local risk.


CVRD: To Net US$1B From Sale Of Four Woodpulp And Paper Assets
--------------------------------------------------------------
CVRD (Companhia Vale do Rio Doce) expects to generate more than
US$1 billion from the sale of its ownership in four woodpulp and
paper assets, South American Business Information reported
Monday. CVRD has interests in Cenibra, Bahia Sul, Florestas Rio
Doce and Celmar. Vale intends to concentrate in iron ore, which
is its core business. Bahia Sul was sold off to Suzano in a
transaction worth US$317 million. With regard to Cenibra, CVRD
previously announced that it would sell off its 51.48 percent
stake via a sealed-bid auction on May 11. CVRD partners with JBP,
a consortium of Japanese woodpulp consumers, with 48.52 percent
common capital in Cenibra. JBP plans to exercise the first refuse
right for the acquisition of Vale's shares in Cenibra. The
Japanese plan to buy only 3 percent stake. Votorantim Celulose e
Papel, Aracruz and the Finish UPM-Kymmene are the prospect
bidders for Cenibra.


GOODYEAR: Focuses Aircraft Tire Production In Brazil
----------------------------------------------------
Tiremaker company Goodyear, which posted a $46.7-million loss in
the first-quarter of this year, decided to focus its production
of aircraft tires in Brazil, according to a South American
Business Information report released Monday. Sparked by a good
performance from its largest client Embraer, Goodyear resumed
business in this segment October of last year. According to
Goodyear manager Mr. Vanderlei Nazareth, until 2002, the company
expects to produce 15 models of tires in Brazil and 30 different
models of tires within the next three years. Goodyear supplies
120 tires per month to Embraer.



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C H I L E
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COMPANIA MINERA: Andacollo Mine Begins Formal Liquidation
---------------------------------------------------------
Mr. Fred Earnest, General Manager of Compania Minera Dayton
("CMD"), a wholly owned subsidiary of Dayton Mining Corporation
(AMEX, TSE: DAY) announces that CMD has entered into agreements
with Henry Butcher International Ltd. ("Henry Butcher") and
Caterpillar Leasing Chile S.A. ("Cat Leasing"). In December 2000,
Dayton Mining Corporation announced that CMD had decided to
permanently close the Andacollo Mine.

Henry Butcher, based in London, U.K., has extensive experience in
asset valuation and the disposal of capital equipment. This
agreement with Henry Butcher is for the marketing and sale of the
mining fleet, crushing plant and conveying/stacking system
located at the Andacollo Mine in north-central Chile. The gold
recovery plant is not part of the agreement, but will be marketed
after the cessation of gold recovery from the heaps. Henry
Butcher will aggressively pursue the disposal of these assets in
Chile and internationally to facilitate compliance with the
creditors plan submitted to the courts of Chile in December 2000.

This world class mining fleet consists of three Caterpillar 992
loaders, eleven Caterpillar 777 haulage trucks and miscellaneous
support equipment as well as an Ingersoll-Rand DM-30 and T-4
drill. All of the equipment was purchased new beginning in 1995
and has been maintained by Finning Chile S.A. under a maintenance
and repair contract. The three-stage crushing plant consists of a
Nordberg 47" x 63" primary jaw crusher, a Nordberg 7' standard
Symons secondary cone crusher and three Nordberg 7' shorthead
Symons tertiary cone crushers. Following on from the crushing
circuit is a system of overland conveyors, grasshopper conveyors,
and a radial stacker. Prior to the suspension of mining and
crushing operations at Andacollo, the mining fleet was producing
over 90,000 tonnes per day of waste and ore and the crushing
plant was operating at the design capacity of 18,000 metric
tonnes per day, producing a final product size of 90% minus 3/8".
The overland conveying/stacking system operated at design with
sustained delivery rates of 1,300 metric tonnes per hour. The
crushing and screening plant was designed and built by Bechtel
Engineering and the overland conveying and stacking system was
designed and constructed by Laurel Engineering.

Representatives of Henry Butcher are on site in Andacollo in
preparation for the commencement of the marketing of these
assets.

An agreement reached with Cat Leasing modifies the existing lease
agreement to allow CMD to sell the mining fleet, with proceeds to
be used to cancel the obligation with Cat Leasing and to
eliminate the penalty clauses in the event that Cat Leasing
unilaterally makes the decision to seek the return of the mining
fleet. Additionally, the agreement specifies the form in which
the fleet will be valued in the event that the fleet is returned
to Cat Leasing upon demand and clarifies the obligations of each
party.

Since the suspension of operations on September 30, 2000, the
Andacollo operation has produced a total of 25,900 ounces of
gold. It is expected that active leaching activities will
continue through the year 2001 after which passive leaching and
heap closure activities will begin. Pit and dump reclamation
activities are underway and are expected to be complete by the
end of 2001. Reclamation of the crushing plant site area cannot
begin until the crushing equipment is sold. Final reclamation
will occur after the heaps are properly rinsed and de-
commissioned, and the gold recovery circuit is sold.

Interested parties should note that in the Company's release of
its year 2000 results, dated April 12, 2001, it was mistakenly
stated that the Company had $4.4 million of unrestricted cash
which was "held in trust for funding claims obligations at
Denton-Rawhide". As correctly shown on the Balance Sheet, there
was $4.4 million of free cash and an additional $2.8 million of
restricted cash that is held in trust to fund Dayton's share of
the reclamation obligations at Denton-Rawhide.



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C O L O M B I A
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BAVARIA: Trading Suspended At Three Stock Exchanges
---------------------------------------------------
The Bogota Stock Exchange said that three of the country's stock
exchanges have suspended the trading of shares in Bavaria SA,
Colombia's No. 1 brewer and most widely traded company, Bloomberg
reported Monday. The move comes after the company requested to
suspend shares pending a planned buyback of up to 25 percent of
its 282 million common shares at 8,312 pesos a share. That
represents a premium of 19 percent to its closing share price of
7,000 pesos Friday in Medellin.

"They may be doing this to help boost their share price," said
Camilo Aristizabal, an analyst at Supervalores SA brokerage in
Medellin. "This is a maximum amount, not the probable amount of
the buyback."

According to Aristizabal, the company's reserve to buy back
shares amounted to about 250 billion pesos ($106 million) and
that it was unlikely to buy back more shares in the short term.
He said the company is probably looking to buy back some of the
shares it turned over to rival beverage tycoon Carlos Ardila
Lulle when Bavaria bought a 45 percent stake in Ardila's
Cerveceria Leona SA in May for an estimated $150 million in stock
and cash.  

Bavaria is involved in arbitration talks with its union to
resolve a wage dispute that led to a 71-day strike. In mid-
December of last year, approximately 4,800 unionized workers
staged a strike at Bavaria demanding raises of 25 percent and
higher pension and health benefits. The strike cost the company
about 100 billion pesos ($44.2 million) in lost revenue, halting
production at Bavaria's 18 plants. Stores were emptied of its
beer and malt brands.



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M E X I C O
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BANCRECER: IPAB Invalidates Dresdner's, Allianz's Claim
-------------------------------------------------------
Mexican bank bailout agency IPAB decided to disallow Dresdner
Bank and Allianz to exercise its option to purchase a small stake
in Mexican pension fund manager Afore Bancrecer,
Reforma/Infolatina reported Monday. The ruling means that the
German firms, which together own a large minority stake in Afore,
will have to bid for a 51-percent stake in the firm along with
other potential buyers when IPAB puts the latter up for sale
shortly. Dresdner and Allianz earlier claimed to hold an option
to purchase a small stake in Afore, which, if exercised, would
give them majority control.

The 51-percent stake is estimated to be worth 90 million dollars,
and is owned by government-intervened Grupo Financiero Bancrecer,
which itself will be placed on the auction block in May. IPAB
shortly will invite bids for the Afore stake from all potential
buyers, believed to include Prudential, Principal, Zurich and
Citibank.


CORPORACION GEO: Employees Buy Shares, Fend Off Takeover
--------------------------------------------------------
In an operation known as "poison pill," the employees of
Corporacion Geo SA, Mexico's No. 1. Homebuilder, agreed to buy
enough shares held in treasury to thwart a hostile takeover amid
share prices that have plunged 65 percent compared to a year ago,
Bloomberg said Monday. "Poison pill" allows company executives
and employees to keep control of the company even if a bidder
acquires all the company's shares traded in the stock exchange.
Geo has 110.47 million shares, 65 percent of which are traded on
the Mexican Stock Exchange. Geo's shares are trading at 65
percent below book value, making it a potential takeover target
as investors often seek to buy control of such corporations at a
discount. They may then sell the assets and cover the company's
financial obligations, ending up with a profit.

Geo said it plans to leave 50 million shares in the treasury
ready to be acquired by employees in case of an unsolicited
offer.  The company also placed in its treasury 10.6 million
shares that it plans to use as part of its compensation program
for executives and employees.


GRUPO AZUCARERO: To Submit New Debt-Restructuring Proposal
----------------------------------------------------------
Leading Mexican sugar company Grupo Azucarero Mexico (GAM) is
expected this week to submit a new debt-restructuring proposal to
the state-run development bank, the National Foreign Trade Bank
(Bancomext), Reforma/Infolatina said Monday. The new plan will be
prepared with the help of Merril Lynch's local office. GAM has
liabilities totaling an estimated $40 million. In July 2000, the
sugar company had a preliminary agreement with Bancomex for the
liquidation of the debt but it fell through.


GRUPO DINA: Denies Receiving Buy-Out Offer From Volvo
-----------------------------------------------------
In a statement to the Mexican Stock Exchange, Mexican truck and
bus maker Grupo Dina denied receiving a buy-out offer from
Sweden's Volvo, in contradiction to media reports which emerged
last week, Reforma/Infolatina reported Monday. Dina, which
earlier this year defaulted on an interest payment on its 2004
convertible bonds, however, admitted that the sale of the company
is being considered as an option. But, according to the company,
the worldwide slump in demand for heavy vehicles has dampened
interest among potential buyers. Dina's financial problems, which
the company blames on the cancellation last year of a 9,000-unit
supply contract by Western Star Trucks, have been the source of  
speculation surrounding the company's future.


GIDUSA: Shuts Down Plant Due To High Production Costs
-----------------------------------------------------
Due to high and unsustainable production costs, Mexico's Grupo
Industrial Durango (Gidusa) decided to shut down one of its
paper-making facilities, company CEO Francisco Ochoa Rodriguez
announced in an Infolatina report published Monday. Rodriguez
says that the labor costs at the plant, sited in Jalapa, in the
Gulf state of Veracruz, represented 25 percent of total costs, as
compared to 10 percent of total costs at Gidusa's other five
plants. Output at the Jalapa plant will be taken over by the
company's other plants, Rodriguez added.


GRUPO BITAL: To Go Be Auctioned Soon
--------------------------------------
Financially-strapped Mexican bank Grupo Financiero Bital will be
put up for sale soon, El Economista/Infolatina reported Monday.
Accordingly, the group's new chairman, Luis Berrondo, whom
shareholders recently named to take over the post of Antonio del
Valle, shortly will begin identifying potential buyers. Among the
foreign-owned institutions which have expressed interest in
acquiring the group are Netherlands-based ING and Banco Comercial
Portugues, both of which already own minority stakes in Bital,
and U.S.-based GE Capital.

Meanwhile, Berrondo plans to take a hands-off approach to the
group's management, saying that his appointment as chairman would
not see his involvement with the group's management deepened.

"I'm a businessman not a banker," Berrondo said. Like Del Valle,
Berrondo is a member of one of three families that collectively
control 51-percent of Bital's voting shares.


TELEVISA: Esmas.com Looks Set To Conquer U.S. Hispanic Market
-------------------------------------------------------------
A recent series of cutbacks at Esmas.com, a horizontal web portal
owned and operated by Mexican media giant Grupo Televisa, will
not hinder it from its attempts to conquer the United States' 30-
million-strong Spanish-speaking market this year,
Reforma/Infolatina related Monday. Santander Mexicano analyst
Francisco Rivera disclosed that Televisa management this year
will cut planned investment in esmas.com by around 20 million
dollars. Televisa has already reduced staff at esmas.com twice
last year and is looking to do so again. Esmas.com used to be the
fourth-most popular web portal in the Spanish-speaking world,
according to Internet consultants Alexa Research, but just a few
months later had slipped to eighth position.


TELEVISA: Needs New Strategy To Stave Off Declining Sales
---------------------------------------------------------
Carlos Alazraki Gossman, president of Mexican advertising agency
Alazraki and Associates, suggested that Grupo Televisa needs to
design a new strategy for generating sales revenue considering
that the slump in its first-quarter sales was the result of a
decision to hike across-the-board advertising prices, El
Economista/Infolatina said Monday. In October, Televisa announced
a 30-percent increase in advertising tariffs for 2001, a decision
which received much criticism from Alazraki, who referred it as a
"grave error." The move forced all small and medium-sized
companies to stop buying air-time from Televisa. Since then,
sales at the company have declined 30 percent.



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V E N E Z U E L A
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SIVENSA: IBH Says Banks Called In Orinoco Loans
-----------------------------------------------
International Briquettes Holding Inc., a unit of steelmaker
Siderurgica Venezolana Sivensa, disclosed that banks called in a
$623 million loan to its Orinoco Iron venture just weeks after it
missed on a $16.3 million payment, according to a Bloomberg
report Monday issue. Analysts expect that the banks' decision
could lead to an opening round of debt restructuring talks. Bank
lenders have advised the company and its guarantors that they
continue to be willing to discuss a possible restructuring of the
Orinoco Iron loans. However, there's still no assurance as to
whether, and if so when, an agreement on the restructuring of the
Orinoco Iron loans will be reached.

"The banks have no need for an industrial plant, which is what
they would get if they foreclosed," according to Alex Dalmady,
managing director of research firm InvestAnalysis. "They also
don't want to give Orinoco Iron more money. But they are in the
boat together," he added.

Orinoco Iron is an equally owned joint venture between IBH and
Australia's BHP Ltd., the company, which previously wrote off
it's A$410 million investment in the plant.




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.

This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed to
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