/raid1/www/Hosts/bankrupt/TCRLA_Public/010511.mbx        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

            Friday, May 11, 2001, Vol. 2, Issue 93

                           Headlines



A N T I G U A  &  B A R B U D A

LIAT: Needs To Reduce Operational Cost To Regain Profitability


A R G E N T I N A

AEROLINEAS ARGENTINAS: Minister Denies Proposing Liquidation


B O L I V I A

COTEL: AES Communications Bolivia Enters Strategic Partnership


B R A Z I L

CESP: AES Withdraws Participation From Forthcoming Bidding
CVRD: Lacks Clear Strategy Over The Long Term, Analysts Say
CVRD: Reports Slight Increase In Net Income For 1Q01
VARIG: Considers Selling Minority Stake In VarigLog


C H I L E

GENER: To Sell 50 Percent Stake In Mega To Canadian Firm


M E X I C O

ARTIKOS: Top Executive Denies Reports Regarding Imminent Closure
BANCRECER: Inbursa Unlikely To Participate In Bidding
BUFETE: Planned Acquisition Stalled Once Again
EUZKADI: Hands Union Reps List Of Workers To Be Dismissed
GMD: Suspension Of Trading In Shares Lifted
LUZ & FUERZA: Posted Net Losses Of 7.56B Pesos For 2000
TELEVISA: To Sell Stake In Skytel As Part Of Cost-Cutting Program
VIDEOVISA: To Face Liquidation


P E R U

SAYAPULLO: Posts Further Losses For 1Q01


     - - - - - - - - - -


=================================
A N T I G U A   &   B A R B U D A
=================================

LIAT: Needs To Reduce Operational Cost To Regain Profitability
--------------------------------------------------------------
Cash-starved regional airline LIAT Limited needs to cut  
operational cost by another 20 percent in order to restore
profitability at the airline, suggested Chief Executive Officer
Garry Cullen in a Caribbean News Agency report Wednesday.

"It is essential that the company reduces its costs by another 20
per cent to be cost effective and to implement the company's
route development and fleet replacements plans," Cullen said.

"All cost categories are being scrutinized and discussions are
currently taking place with trade union representatives right
across LIAT's network," he added.


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

AEROLINEAS ARGENTINAS: Minister Denies Proposing Liquidation
------------------------------------------------------------
Alberto Natale, chairman of the Argentinean bicameral
parliamentary commission, said that Carlos Bastos, infrastructure
minister, is considering a quick liquidation of airline
Aerolineas Argentinas in order to transfer the airline's control
to a shareholder that would enable it to remain in operation,
Ambito Financiero related Wednesday. However, Mr. Bastos denied
proposing the airline's liquidation and said that this measure
was only mentioned in parliament as a solution that the
government did not want. What is most certain right now is that
the Argentinean government will not assume Aerolineas Argentinas'
debts, and expects the Spanish state holding company (Sepi) to
divest of a company which it controls and which makes annual
losses of $300 million.



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

COTEL: AES Communications Bolivia Enters Strategic Partnership
--------------------------------------------------------------
The AES Corporation (NYSE:AES) announced today that its
subsidiary AES Communications Bolivia signed a strategic alliance
agreement with COTEL, the largest local telephone carrier in
Bolivia, that operates in the greater metropolitan area of La
Paz, the nations capital and largest city of the country.

The agreement calls for COTEL to purchase up to 15 percent of AES
Communications Bolivia for approximately $21 million, which will
be paid in the form of COTEL interconnect charges and the usage
of COTEL infrastructure, such as outside plants, poles, ducts and
last mile connection for a period of 40 years.

The COTEL interconnect charges will be based on a total of 275.1
million minutes of service which AES Communications Bolivia will
be entitled to use without charge. It is estimated that this
quantity of minutes will be equivalent to 3 to 6 years of usage.

AES Communications Bolivia initiated data transmission services
in the city of La Paz, Bolivia in September 2000 and is currently
building a fiber optic network across Bolivia to provide state-
of-the-art communication services, including data transmission,
internet and national and international long distance telephony.

Tom Tribone, Executive Vice President of AES stated, "We are very
pleased to enter this alliance with COTEL, we believe that it
will be very beneficial to both of us. It positions AES
Communications Bolivia as one of the top two telecommunication
providers in the country by establishing our business in the
largest metropolitan market and acquiring a client base that
currently generates 40% of the country's incoming and outgoing
long distance calls. COTEL, with its 165,000 customers will
benefit from AES's national and international network that will
provide the horizontal telecommunication integration that the
cooperative has been searching for in order to prosper in the new
deregulated environment."

Dennis Bakke, CEO of AES, stated, "We're making a difference in
Bolivia by providing the vital infrastructure needed there and
this alliance with COTEL is a major step forward as we extend our
mission in Bolivia."

COTEL, which is currently under government intervention, 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
===========

CESP: AES Withdraws Participation From Forthcoming Bidding
----------------------------------------------------------
AES Corp.'s Brazilian unit announced it would not bid for Cia.
Energetica de Sao Paulo (Cesp) next week, Bloomberg said
Wednesday. The company's decision came after the government
announced a plan to ration electricity in Brazil's southeast,
northeast and midwest states beginning next month as less rains
reduced power generation capacity in hydroelectric plants.

"AES will not take part in the auction. Cesp is an extremely
leveraged company and the risks will be very high," said Andrea
Ruschmann, investor relations director, for AES Tiete SA, one of
AES's four units in Brazil.

According to AES, Cesp's high debt would make it difficult for
AES to receive returns from its investment. Cesp has about 5.6
billion reais in debt, most of it U.S. dollar-denominated.

Meanwhile, the governor of Minas Gerais state Mr. Itamar Franco
wants to guarantee the participation of Cemig (Companhia
Energetica de Minas Gerais) in Cesp's privatization, which is
slated for mid May 2001.


CVRD: Lacks Clear Strategy Over The Long Term, Analysts Say
-----------------------------------------------------------
Four years after its privatization, mining major CVRD showed a
market value of R$17.1 billion at the end of 2000, with growth in
its income, South American Business Information said Wednesday.
However, market analysts believe that the company lacks a clear
strategy over the long term. Since its 1997 privatization, CVRD
has concentrated in iron ore mining, invested in logistics, and
power generating, while it divested assets as woodpulp and paper,
and steelmakers.

CVRD has hired McKinsey consulting and investment banks to define
more precisely investments and business development, and should
present its plans within 90 days. CVRD's owners, associated in
Valepar holding, are also seeking opportunities to grow.

The company wants to establish long term relationships with
customers for its iron ores, and also nonferrous metals as copper
and aluminum. In the copper areas, the company plans to develop
reserves in Carajas mineral reserves, associated with
international partners.

Meanwhile, CVRD is reinforcing its position in logistics, namely
in coastal navigation and railroads. Logistics may account for 20
percent of its revenues in the near future, against the current 8
percent.


CVRD: Reports Slight Increase In Net Income For 1Q01
----------------------------------------------------
Brazil's Cia. Vale do Rio Doce, the world's No. 1 iron-ore
exporter, announced a 3 percent increase in its first-quarter
non-consolidated net income to 660 million reais ($291.7
million), or 1.71 reais per share, from 639 million reais, or
1.65 reais per share in the year-earlier quarter, Bloomberg
reported Wednesday.  

"The good thing with an exporting company is we may do badly at
first when the real weakens, but later on we see the advantages,"
said CVRD Chief Financial Officer Gabriel Stoliar. "With price
increases in our products this year, we're looking at an
extremely favorable situation from here on," he added.

CVRD saw sales revenue rise as a 9.4 percent decline in the value
of the real against the dollar saw the local currency value of
its dollar-priced exports rise. Meanwhile, the weaker currency
caused losses as the local currency value of its dollar-
denominated debts rose. CVRD recorded a 220-million-real pretax
currency exchange loss as a result of the weaker real during the
quarter.

In a related story, CVRD and the German steelmaker Thyssen Krupp
Stahl AG concluded May 8 the blast furnace pellets price
negotiation for 2001, settling on a 1.75 percent rise.


VARIG: Considers Selling Minority Stake In VarigLog
---------------------------------------------------
As part of an effort to cut debts by some US$500 million,
National carrier Varig is considering the sale of a 30-percent
stake in its VarigLog logistics unit, AFX-Europe announced
Wednesday. According to a company spokesman, the company's debt
stands at US$1.3 billion, including US$200 million coming due
this year, and that servicing this debt has left it with a
negative cashflow of US$65.4 million.

"We calculate that we could deal with debt levels of around $800
million," the spokesman added.

Besides the planned sale of VarigLog, the company is also looking
to either increase income or expand into other business sectors.

"Excluding the VarigLog deal it will take us 18 years to pay off
our debts," he said, adding that selling the entire unit has been
ruled out.

The spokesman blamed the rising dollar for Varig's worsened debt
situation, noting that 85 percent of the company's debt is
dollar-denominated.



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C H I L E
=========

GENER: To Sell 50 Percent Stake In Mega To Canadian Firm
--------------------------------------------------------
The power generator company Gener decided to sell its 50 percent
stake in the US power distributor Mega to the Canadian firm
Transalta, owner of the other 50-percent stake, according to a
report Wednesday in South American Business Information.
According to General Manager Andr,s Gluski, Mega wasn't a source
of income. Gener, a subsidiary of the US group AES, decided to
sell its foreign operations and plans to focus its investments in
the Chilean market. It will also sell off assets in the US,
Dominican Republic, Colombia and Argentina. AES is restructuring
the company after paying US$1.3 billion last year for its
acquisition.



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

ARTIKOS: Top Executive Denies Reports Regarding Imminent Closure
----------------------------------------------------------------
Edgardo del Rincon, a top executive at Artikos, a joint corporate
Internet services venture between U.S.-based Commerce One and
Mexico's Banamex, denied reports that the company shortly could
be closed down, according to Reforma/Infolatina on Wednesday. Del
Rincon explained that the company's move to transfer jobs in
other areas of Banamex's business is part of a downsizing process
currently being implemented at the company, not because venture
partners Commerce One and Banamex no longer see eye to eye, as
has been previously reported. In fact, according to Del Rincon,
relations between the venture partners are excellent.

Artikos has engaged in the provision of electronic-commerce
services for third parties, ranging from construction of web
sites to development of business-to-business (B2B) strategies.
Del Rincon disclosed that the company, in partnership with
Chile's National Construction Industry Chamber, would launch a
B2B web portal in the South American country. Further, he said
that Artikos is currently in talks on a range of new projects.


BANCRECER: Inbursa Unlikely To Participate In Bidding
-----------------------------------------------------
Mexico's Grupo Financiero Inbursa, part of the business empire of
Telefonos de Mexico (Telmex) magnate Carlos Slim, is seen as
unlikely to participate in the bidding for government-intervened
Bancrecer when bank bailout agency IPAB puts it on the auction
block later this month, Reforma/Infolatina reported Wednesday.
Disinterest arose from Slim's skepticism over opportunities
afforded by bank reprivatization in Mexico. Furthermore,
Inbursa's unlikely participation is evident in the announcement
of its plans to invest substantially in electronic and online
banking.


BUFETE: Planned Acquisition Stalled Once Again
----------------------------------------------
The terms of a proposed $400 million friendly takeover of debt-
laden Mexican construction company Bufete by Grupo Serbo's Sergio
Bolanos is yet to be finalized, according to a Reforma/Infolatina
report Wednesday. Factors contributing to the delay are:

- the complications arising from an 80-million-dollar tax debt
being carried by Bufete

- an estimated $500 million debt contracted by Bufete
subsidiaries that Bolanos does not wish to acquire

- equity stakes in the company Bufete has ceded to creditors in
previous efforts to reduce its liabilities

According to the report, Bolanos plans to acquire only Bufete's
main subsidiary, Biconsa, which has not lifted its suspension of
payments yet. Before Bolanos can carry on with its planned
acquisition, he must inject capital into the company first.


EUZKADI: Hands Union Reps List Of Workers To Be Dismissed
---------------------------------------------------------
On Tuesday, Tiremaker Euzkadi delivered to union representatives
a list of 250 workers who will be dismissed in order to ensure
the survival of the plant, sited in El Salto, in the western
Mexican state of Jalisco, Reforma/Infolatina said Wednesday.
Euzkadi, in a press statement, said that the employees to be
fired would get severance packages equivalent to four months'
wages plus seniority bonuses. The company, though aware that the
move was extreme and very painful, said that it was an
indispensable measure to keep the company afloat.


GMD: Suspension Of Trading In Shares Lifted
-------------------------------------------
Trading in shares of Grupo Mexicano de Desarrollo resumed
Wednesday after it submitted to the Mexican Stock Exchange the
information it had requested shortly after trading closed
Tuesday, according to an AP report. The exchange had suspended
trading in the construction company early Tuesday, shortly after
the U.S. Securities and Exchange Commission filed charges against
its former chairman, Jorge Ballesteros and 15 others, including
his relatives and friends, for alleged insider trading in shares
of Nalco Chemical Co. in 1999.  

GMD said late Tuesday that Ballesteros has not been the company's
chairman, or a member of its board, since July 2000.

This situation was made known to the investing public, Mexican
financial authorities and the Securities and Exchange Commission,
GMD said.

A GMD filing on the Mexican stock market Web site dated Oct. 26,
2000, announced Ballesteros' separation from the GMD board of
directors, and his replacement by Manuel Gomez-Daza Rangel.


LUZ & FUERZA: Posted Net Losses Of 7.56B Pesos For 2000
-------------------------------------------------------
Mexican state-owned power utility Luz & Fuerza del Centro (L&FC)
posted a net loss of 7.56 billion pesos for the year 2000,
against a net loss of 2.41 billion pesos in the previous year, El
Economista/Infolatina reported Wednesday. Company sources
attributed last year's losses to the increases in the cost of
combustible fuels, such as natural gas. The company, earlier said
it has been losing 1 billion pesos annually due to electricity
theft committed by companies working without contracts. L&FC has
been in the red since 1994 despite federal subsidies aimed at
buoying the company. L&FC is implementing new strategies intended
to improve service quality and eliminate corruption amongst
workers.


TELEVISA: To Sell Stake In Skytel As Part Of Cost-Cutting Program
-----------------------------------------------------------------
Unidentified sources at Mexico's Grupo Televisa revealed that the
company is now ready to sell its 51-percent stake in paging
subsidiary Skytel as part of its cost-cutting program, Infolatina
reported Wednesday.

"The company's position is that if a good offer turns up, the
sale could be made," said one source.

Skytel serves 250,000 subscribers in Mexico and it operates in 20
countries in the Americas, including the United States. The other
49-percent Televisa stake is owned by U.S.-based Mobile
Telecommunications Technologies Corp.


VIDEOVISA: To Face Liquidation
------------------------------
Liquidation at Grupo Videovisa, which pioneered video-rental in
Mexico, looms ahead, Reforma/Infolatina said Wednesday. Unnamed
sources at the company revealed that even after Videovisa has
divested all of its subsidiaries, it still doesn't have enough
money to fulfill its obligations to its creditors and to its
employees. The trading of company's shares was suspended on April
at the Mexican Stock Exchange by Mexico's National Banking and
Securities Commission (CNBV). Videovisa has 1,100 video-rental
outlets throughout Mexico, 180 of which it owns, with the
remainder owned and operated by franchisees.



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P E R U
=======

SAYAPULLO: Posts Further Losses For 1Q01
----------------------------------------
Sayapullo, the Peruvian mining company, which has declared
voluntary insolvency, posted a 43-percent increase in net losses
to S$1.39 million (US$386,000) for the first quarter of this
year, against the S$970,000 in the same-period a year ago,
according to a report Wednesday in Business News Americas. The
company, which is currently in the process of restructuring, is
involved in a legal conflict with Peruvian polymetallic miner
Milpo. Sayapullo began experiencing problems a couple of years
ago when severe storms caused by the El Nino weather phenomenon
ravaged its mine in the northern part of Peru.




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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The TCR Latin America subscription rate is $575 per half-year,
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