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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

            Thursday, May 10, 2001, Vol. 2, Issue 92

                           Headlines



A R G E N T I N A

AEROLINEAS ARGENTINAS: Could Be Looking At A New Owner
BANCO DE CORDOBA: Bidding Rules Now Released
MASSERA: Sale Draws Interest From Several Groups


B R A Z I L

CESP: Rules Governing Sale Ban Cemig From Bidding
VESPER: Brasil Telecom To Bid For BCI Stake


C O L O M B I A

EMCALI: Government To Decide Company's Future In June


M E X I C O

AHMSA: Meets With Bondholders For Restructuring Plan Approval
ATLANTICO: Bital Considers 3 Firms To Conduct Final Audit
BUFETE: Bolanos Proposed Takeover Sees Conclusion By Month's End
GMD: U.S. SEC Sues Chairman And Others For Insider Trading
HYLSAMEX: Strike At Venezuelan Subsidiary Costing $3M Per Day
MOTOROLA: Chairman Defends Recent Weak Performance
SAVIA: Preliminary Debt-Restructuring Deal Not Fictional
TELEVISA: Announces Cut On Planned Expenditures For 2001


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

AEROLINEAS ARGENTINAS: Could Be Looking At A New Owner
------------------------------------------------------
Eduardo Eurnekian, head of a consortium in charge of the majority
of Argentine airports has expressed an interest in gaining
control of Aerolineas Argentinas, El Mundo reported Tuesday.
Accordingly, negotiations between Mr. Eurnekian and Aerolineas'
majority shareholder, Spanish state industrial holding company
SEPI, are underway. However, success of the negotiations depends
on the agreement between trade unions and current shareholders.
Just recently, Aerolineas faced strike action following 500 job
cuts, which left the airline's operations paralyzed for nine
days. The staff cuts are in line with a restructuring plan
introduced by SEPI to avoid bankruptcy. SEPI controls 85 per cent
of Aerolineas. The Argentine government holds a stake of five per
cent and Aerolineas employees also hold a minority position.


BANCO DE CORDOBA: Bidding Rules Now Released
--------------------------------------------
Argentina's Cordoba province published the bidding rules May 7
for the privatization of Argentinean state-owned bank Banco de la
Provincia de Cordoba, a Cordoba province official confirmed to
Business News Americas. The bidding rules have been approved by
the World Bank and are on sale. Cordoba province will sell 87
percent of the bank to the private sector and 12 percent to
employees, with the provincial government retaining a golden
share.

TCR-LA previously reported that KPMG, Alpha and Roberto
Dominguez, the consultants hired to advise the government on the
sale, revealed that the privatization process of the bank will
kick off on the 5TH of September this year. They further
disclosed that the bank's financial restructuring would demand
some 730 million pesos from the province of Cordoba and 384
million pesos from the National Treasury.


MASSERA: Sale Draws Interest From Several Groups
------------------------------------------------
The anticipated sale of the assets owned by Argentine ice-cream
group has drawn the interests of Argentine companies, food groups
and foreign private investment funds, Buenos Aires Economico
reported Tuesday. According to Estudio Enrique Kiperman y
Asociados, trustee and manager of the public offer to sell the
firm, Massera has a prestigious brand name and has a considerable
growth potential. Massera, whose shareholders filed for
bankruptcy in September last year due to a series of external
problems, has been valued at a minimum price of $15.7 million.
However, legal sources believe that interest in the company may
boost the offer price. Sealed bids for the company will be opened
on 20 June, with the two highest bidders being invited to compete
against each other.



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

CESP: Rules Governing Sale Ban Cemig From Bidding
-------------------------------------------------
Brazilian power group Companhia Energetica de Minas Gerais SA
(Cemig) cannot take part in the auction for the controlling stake
of Companhia Energetica de Sao Paulo (Cesp), according to a Dow
Jones Newswires report released Tuesday. The rules governing the
sale of the Sao Paulo government's stake in Cesp forbid state-
owned companies to participate in privatizations. Also, power
regulator Aneel stressed that it would be anti-competitive if
Cemig succeeded in buying the stake in Cesp since such a move
would hand Cemig some 28 percent of all electricity generated in
southeast Brazil, three percentage points above a limit set by
law. Cemig said that the state government of Minas Gerais has
gone to the Supreme Court in Brasilia to fight against the
restriction on state companies.


VESPER: Brasil Telecom To Bid For BCI Stake
-------------------------------------------
Brasil Telecom, which operates in 9 states of Brazil, is to bid
for 32.1 percent shares in Brazilian WLL fixed telephone services
company Vesper held by BCI (Bell Canada International), South
American Business Information reported Tuesday. Vesper is the
mirroring company of Telefonica, at Sao Paulo state and Telemar
at Rio de Janeiro state. Last year, Vesper posted losses of R$843
million and reported earnings of R$172 million.

BCI plans to divest its participation in the telecom carrier, as
it intends to focus on cellular mobile communications through
Telecom Americas. However, the negotiations with Velecom and
Qualcomm regarding BCI's US$875 million stake were put off.
Vesper is controlled by Bell Canada International (BCI), VeleCom
and Qualcomm.



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

EMCALI: Government To Decide Company's Future In June
-----------------------------------------------------
Colombia's government will decide in June on the future of the
debt-ridden public services company Emcali, according to a report
Tuesday in Business News Americas. The government will either
call a tender to capitalize the company with private partners or
bring about an alliance with EPM, the public services company
serving Medellin. Furthermore, the government could also chose to
capitalize the company through a special credit with a guarantee
from central government, in order to later privatize the company.

The Colombian utility Emcali, which has been administered for the
past year by the public services superintendence due to its poor
financial health, works in the electricity sector,
telecommunications, environmental sanitation and other services.



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

AHMSA: Meets With Bondholders For Restructuring Plan Approval
-------------------------------------------------------------
Leading Mexican steelmaker Altos Hornos de Mexico (AHMSA) is
attempting to obtain approval from bondholders for its debt-
restructuring plan, which has already been negotiated with its
creditor banks, Reforma/Infolatina reported Tuesday. AHMSA is
scheduled to meet with bondholders during the latter half of May
in order to secure their approval, a move, which is seen to be a
prelude to an announcement that AHMSA has lifted its two-year
suspension of payments. The bondholders have a period of four
months in which to accept or reject the restructuring plan, which
is backed by a syndicate of banks led by Bank of America. AHMSA
owes its bondholders an estimated $510 million, or about 27
percent of the company's total debt.


ATLANTICO: Bital Considers 3 Firms To Conduct Final Audit
---------------------------------------------------------
Mexico's fourth largest financial services/banking entity Bital
is expected to choose a firm this week to conduct a final audit
of its acquisition of government-intervened Banco del Atlantico,
Reforma/Infolatina reported Tuesday. Among the potential firms
likely to be chosen to do the task are KPMG, Arthur Andersen and
PriceWaterhouseCoopers. According to the report, the audit will
last between 20 to 40 days.


BUFETE: Bolanos Proposed Takeover Sees Conclusion By Month's End
----------------------------------------------------------------
The proposed takeover by Grupo Serbo's Sergio Bolanos of No. 3
Mexican engineering and construction firm Bufete will likely be
concluded by the end of the month, according to sources close to
the transaction in a report last week by Corporate Mexico. In
recent weeks, rumors have circulated that the proposed takeover
was on the verge of collapse.

Sources revealed that the transaction would include assumption of
Bufete's tax debt by Bolanos. They further said that talks with
the Mexican Finance ministry have been held regarding the matter.



GMD: U.S. SEC Sues Chairman And Others For Insider Trading
----------------------------------------------------------
U.S. Securities and Exchange Commission filed a lawsuit against
the chairman of Mexican construction company Grupo Mexicano de
Desarrollo SA (GMD), Jorge Eduardo Ballesteros Franco, and 15
others for massive and highly profitable insider trading, in
which they allegedly made more than $3.7 million, Reuters said
Tuesday.

In charges filed on Tuesday, the U.S. stock market regulators
sued Ballesteros and some family members and friends, including
his dead brother's estate, for trading on non-public information
about the upcoming merger between Nalco Chemical Co. with Suez
Lyonnaise des Eaux, a French utilities and media firm, in 1999.
According to the SEC, Jose Luis Ballesteros Franco, a Nalco
director and former Grupo Mexicano vice chairman, tipped off the
group after learning of the merger at a closed meeting,
triggering a succession of illegal trades in Nalco shares by
members of the Ballesteros family and two friends.

Jose Luis Ballesteros, who died in a car accident in 2000, and
the others involved tried to conceal their trading by using a
series of offshore accounts to buy more than $7.2 million worth
of Nalco stock, the SEC added.

GMD underwent debt-restructuring in 1997 and was able to resume
trading on the local stock exchange in November after a two-year
suspension because of its financial losses. The restructuring
included the transfer of $195.7 million in assets into a trust to
pay creditors.


HYLSAMEX: Strike At Venezuelan Subsidiary Costing $3M Per Day
-------------------------------------------------------------
A strike at Venezuela's largest steelmaker Siderurgica del
Orinoco SA (Sidor) is costing Hylsamex and TAMSA an estimated $3
million per day, according to an El Economista/Infolatina report
published Tuesday. Hylsamex and TAMSA jointly own Grupo Amazonia,
which in turn owns a 70-percent stake in Sidor.

Hylsamex is Mexico's third-largest steelmaker. The company posted
a first quarter net loss of P$239.7 million for this year, versus
a net profit of P$175.4 million in the same period of the
previous year. A subsidiary of Monterrey-based Grupo Alfa,
Hylsamex is currently facing liabilities amounting to US$1.3
billion. Alfa recently announced plans to divest either a
minority or majority stake in Hylsamex in an attempt to lighten
the group's overall debt load.


MOTOROLA: Chairman Defends Recent Weak Performance
--------------------------------------------------
Speaking at the company's annual meeting outside Chicago,
Motorola Inc. Chairman Christopher Galvin responded questions
raised by shareholders concerning the recent weak performance of
Motorola's stock, saying that the cell phone maker is on the road
to recovery, Reuters reported Monday. Furthermore, he tried to
defend his annual bonus in light of the technology giant's
struggles and said that he hopes the company will be the first
technology firm to emerge from the current recession.

"We do have a major issue and that is our stock price is a
disappointment in this environment," he said.

"There are certain factors in our control and those are the ones
we are managing," he related, adding, "there are certain factors
outside of our control that we have to manage through and
around."

Galvin said at the meeting that Motorola is strategically focused
and financially sound. The tech recession was one of the main
reasons for the company's struggles, and the money-losing
semiconductor unit would have risen to industry profit standards
by the first quarter if not for the slowdown.

Some analysts and investors have speculated recently on whether
Galvin would be pressured to resign from his role as chairman and
chief executive.


SAVIA: Preliminary Debt-Restructuring Deal Not Fictional
--------------------------------------------------------
Senior executives at Mexican agro-biotechnology company Savia, a
subsidiary of Monterrey-based Grupo Pulsar, insist that reports
about the company reaching a preliminary agreement on a debt-
restructuring plan with bank creditors are true, according to a
report Tuesday in Reforma/Infolatina. This announcement from the
company contradicts a recent statement released by creditor banks
denying the existence of such an agreement.

According to Savia executives on Monday, in addition to the
preliminary agreement between the company and bank creditors,
Savia subsidiary Seminis, one of the world's largest producers of
fruit and vegetable seeds, was poised to sign a debt-
restructuring deal with its creditors. Savia's liabilities total
an estimated 900 million dollars.


TELEVISA: Announces Cut On Planned Expenditures For 2001
--------------------------------------------------------
Grupo Televisa SA, Mexico's top media company, announced it has
already cut planned expenditures this year by $60.5 million,
Reforma/Infolatina said Tuesday. However, the results of the
recent move will not be evident at least until the third quarter
of this year. The world's largest producer of television
programming in Spanish still anticipates weak second-quarter
results, according to local analysts who attended a meeting with
Televisa executives. Televis, during the second quarter, will be
hit with heavy one-time costs from a recent spate of firings.
According to predictions by executives of the company, the cost
cuts will have had an impact on group earnings by the end of 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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