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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 16, 2001, Vol. 2, Issue 96

                           Headlines



A R G E N T I N A

AEROLINEAS ARGENTINAS: Eurnekian Forging Ahead On Acquisition
AEROLINEAS ARGENTINAS: Union Leaders To Meet With Labor Minister


B R A Z I L

CESP: AES Seen Quitting Auction
CESP: Cemig In The Hunt For Strategic Partner
CPFL: Posts First Quarter Results
CVRD: Two Shipping Subsidiaries Officially Put On Sale
GLOBO CABO: Reports 1Q01 Loss Of $201M
INDUSTRIAS KLABIN: Blames Low Volume, Prices Income Drop 1Q01
PAO DE ACUCAR: Announces First Quarter Results; Splits Operations


C O L O M B I A

AVIANCA: Announces Debt-Restructuring Program


E C U A D O R

FILANBANCO: Government To Issue $300M Bonds To Recapitalize Bank


M E X I C O

AMSA: Cancels Annual General Meeting Due To Financial Position
BANCRECER: IPAB To Respect German Firms' Claim
TELEVISA: Seen Closing A Deal With Univision


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A R G E N T I N A
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AEROLINEAS ARGENTINAS: Eurnekian Forging Ahead On Acquisition
-------------------------------------------------------------
Eduardo Eurnekian, owner of Argentinean airport operator
Aeropuertos Argentinas 2000 (AA2000), move forward with his plans
to acquire control of airline Aerolineas Argentinas, Buenos Aires
Economico reported Monday. According to the report, Eurnekian
could have the support of Delta Airlines and Lufthansa Technics
on a technical level.

Last week, Mr. Eurnekian met with Sepi, the Spanish state holding
company and controller of Aerolineas Argentinas, to discuss his
entry into the airline. Report has it that he would enter the
airline with a group of mainly Argentinean partners, including
Southern Winds, the Argentinean airline in which he holds a 30
percent stake.


AEROLINEAS ARGENTINAS: Union Leaders To Meet With Labor Minister
----------------------------------------------------------------
Ariel Basteiro, secretary-general of Aeronautical Workers
Association (APA) informed that Aerolineas Argentinas union
leaders were to meet with Labor Minister Patricia Bullrich later
Monday, according to an AFX Europe. The meeting was scheduled in
an attempt to find a solution to the conflict between employees
and the airline's management.

According to Basteiro, the labor ministry is the only entity
capable of finding a solution to the crisis. Aerolineas' managers
don't have any willing to do so, and are always creating
conflicts with the workers, he said in reference to the layoffs,
then to the delay in the payment of salaries.

Basteiro said that salary cuts would not be taken up during the
meeting, as he believes putting cuts in place will only worsen
the situation of the workers, who still have not been paid for
the month of April. The April salaries of the staff will not be
paid until May 22, with the company alleging financial problems
as a result of a recent nine-day strike to protest layoffs.



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B R A Z I L
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CESP: AES Seen Quitting Auction
-------------------------------
The US electric power company AES decided to suspend its US$2.5-
billion investment in thermal electric power facilities after
failing to comply with some of the sector rules adopted by Aneel
(Agencia Nacional de Energia Eletrica), South American Business
Information reported Monday. Eventually, it might also pull out
of the auction for Cesp, which is scheduled for mid May of this
year. The three projects for the construction of new thermal
electric facilities - Termosul (Rio Grande do Sul), Santa Branca
and Bariri (Sao Paulo) - were suspended due to the tariff policy
adopted by Aneel that hinders the works financed by the banks,
AES explained.


CESP: Cemig In The Hunt For Strategic Partner
---------------------------------------------
Cemig (Companhia Energetica de Minas Gerais) is now on the
lookout for a Brazilian partner in order to participate in the
auction for a controlling stake in Cesp Parana, according to a
South American Business Information report published Monday. The
move follows a condition set by Aneel (Agencia Nacional de
Energia Eletrica) that Cemig be allowed to take part in the
auction provided that it forms part of a consortium in order to
prevent it from becoming a majority shareholder.


CPFL: Posts First Quarter Results
---------------------------------
Companhia Paulista de Forca e Luz (CPFL), whose primary business
includes the transformation and distribution of electric power,
construction and operation of production systems and other
related activities, posted Monday a first quarter net loss of R$
52.82 million, according to a Brazil Financial Wire report. The
company registered a 10 percent increase in net revenues to
R$605.77 million, while the gross result stood at R$ 31.11
million, a 7.9 percent decline. By the same year-on-year
comparison, CPFL's operating profit also moved to the red,
deteriorating to losses of R$ 48.18 million from gains of R$
28.51 million. Net equity totaled R$ 4.2 billion by end-March.


CVRD: Two Shipping Subsidiaries Officially Put On Sale
------------------------------------------------------
Brazilian mining giant Companhia Vale do Rio Doce announced that
its two subsidiaries Docenave and Seamar Shipping Corporation are
now officially on the market, according to a report Monday in
European Intelligence Wire. The move follows a decision by CVRD
to reduce substantially its ship-owning interests and refocus
instead in its core activity, which is mining. Financial services
firm Credit Suisse First Boston has been appointed to manage the
sale, which follows a feasibility study commissioned at the end
of last year.

Docenave and Liberia-based Seamar together shipped over 35m tons
of products last year, mostly iron ore and coal. Net revenue from
these activities was R$500 million in 2000.

"The sale will leave the company with interests in the cabotage,
towage and offshore industries," said Jose Carlos Da Rocha,
Docenave's general manager for cargo and containers.


GLOBO CABO: Reports 1Q01 Loss Of $201M
--------------------------------------
The Rio de Janeiro-based Globo Cabo announced a 4-percent decline
in its first-quarter loss to R$201 million, or about 7 centavos
per share, against a loss of R$209 million, or about 12 centavos
per share, in the year-earlier quarter, Bloomberg related Monday.
Net sales increased by 74 percent to R$279.7 million from R$161
million a year ago as the number of its subscribers grew by 9.5
percent to 1.52 million in the first quarter compared with a year
ago. However, this growth in sales was undermined by the rising
cost of its dollar-denominated debts, which was brought about by
a 9.4 percent decline in the value of the real currency during
the quarter.

At the end of 2000, the Brazilian cable-TV operator had R$1.56
billion of short and long-term debt, about 59 percent of it in
dollars. Equity investors have largely dumped the company --
which in its five-year history has never made a profit -- making
it the worst performing stock on the country's benchmark Bovespa
index.


INDUSTRIAS KLABIN: Blames Low Volume, Prices Income Drop 1Q01
-------------------------------------------------------------
Industrias Klabin de Papel e Celulose SA Latin America's largest
pulp and paper company attributed its drop in income to the low
volumes and prices in the first quarter of 2001, South American
Business Information said Monday. It posted sales totaling
435,000 m tons, a 5-percent reduction from last year's fourth
quarter. Its net income fell by 6 percent to R$536 million. The
gross earning was reduced by 8 percent reaching R$217 million but
the gross margin was of 40 percent. The EBITDA was of R$178
million and the EBITDA' margin increased from 31 percent to 33
percent. The financial expenses totaled R$250 million and
represented a loss of R$80 million.


PAO DE ACUCAR: Announces First Quarter Results; Splits Operations
-----------------------------------------------------------------
Brazilian supermarkets chain Pao de Acucar reported comparable
store sales of R$683.6 million in April 2001, a 2 percent
increase on the same period in the year 2000, according to an O-
Globo Brazil report Monday issue. Of the group's four chains,
three reported a rise in comparable sales. Sales of Pao de
Acucar, Eletro (consumer electronics chain) and Extra
(hypermarkets) rose by 5.1 per cent, 21.6 per cent and 1.6 per
cent respectively, while sales of Barateiro fell by 11.7 per
cent.

Meanwhile, the company also known as CDB (Companhia Brasileira de
Distribuicao), decided to split the operations of Barateiro, Pao
de Acucar, Extra and Eletro in a bid to save R$50 million within
the next 12 months. The company hired the consulting services
firm McKinsey to assist in its strategic planning going forward.



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C O L O M B I A
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AVIANCA: Announces Debt-Restructuring Program
---------------------------------------------
Avianca, the Colombian airline controlled by Valores Bavaria,
informed the securities commission of its debt-restructuring
program, South American Business Information reported Monday. The
program calls for changes in the leasing contracts and in the
pending debts of Valbavaria. During the first quarter of this
year, Avianca registered losses of Pesos$98,000mil, while assets
were at negative Pesos$387,000mil. Debts were scheduled for
payment within 7 years with a grace period for the company to
resume performance. As of March-end Avianca has liabilities of
Pesos$1.3bil. US$68.5mil of debts are to be exchanged for equity
in the company as part of the process to integrate Avianca and
its competitor Aces.



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E C U A D O R
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FILANBANCO: Government To Issue $300M Bonds To Recapitalize Bank
----------------------------------------------------------------
In a bid to boost state-owned bank Filanbanco SA's solvency
level, which is significantly below the legal minimum, Ecuador
plans to issue government bonds worth $300 million, Bloomberg
reported Monday. The law requires banks to have a capital
adequacy ratio requirement of nine percent and Filanbanco's
current level of 1.3 percent means it would be forced to close
without state help.

Filanbanco is currently run by the Deposit Guarantee Agency, but
will be put under the control of the finance ministry in order
for the bonds to be issued, banking superintendent Miguel Davila
revealed.

"The ministry of finance will be the new owner of the bank, which
means the government will be obliged to help re-capitalize the
bank," said Davila.

``On this base we will make the request for the issue of the
bonds.''

The government still requires authorization from the Attorney
General to issue the bonds.

Filanbanco, which was seized by Ecuadorian regulators in
December, came under financial pressure in recent months as a
result of poor management, a drop in bad loan recoveries and
excessive staffing, Davila explained.



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M E X I C O
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AMSA: Cancels Annual General Meeting Due To Financial Position
--------------------------------------------------------------
Ahmsa, Mexico's largest steelmaker, which filed for bankruptcy
protection in May of 1999, has cancelled its annual general
meeting, according to last week's report in Business News
Americas. This is the second time in a row that Ahmsa cancelled
an annual general meeting because of its delicate financial
condition. According to Ahmsa, controlled by Grupo Acerero del
Norte (GAN), it would not be able to hold the meeting until it
has resolved the situation with its creditors.


BANCRECER: IPAB To Respect German Firms' Claim
----------------------------------------------
Dresdner Bank and Allianz will now be able to exercise their
option to buy a further 3.5-percent stake in Afore Bancrecer, a
pension fund manager owned by government-intervened bank
Bancrecer, Reforma/Infolatina reported Monday. The decision comes
after Mexican bank bailout agency IPAB announced it would honor
the German firms' claim after battling against them for several
months. As a result, the German firms, which together already own
a 49-percent stake in the pension fund manager, will boost their
position to a majority stake of 52.5 percent.

IPAB originally denied the German firms' claims because it wanted
to auction off a majority stake in the pension fund manager in an
effort to attract the highest bidder. Now that it can only
auction off a 47.5 percent of Afore Bancrecer, firms believed to
have been interested in bidding - including Prudential, Citibank
and Principal - may well now have lost interest.


TELEVISA: Seen Closing A Deal With Univision
--------------------------------------------
Speculation continues to circulate that Mexican media giant Grupo
Televisa is on the verge of reaching an agreement with U.S.
Hispanic television network Univision, according to a report
Monday in Reforma/Infolatina. The transaction will eventually
lead Televisa to increase its stake in Univision in exchange for
providing the U.S. network more Spanish-language programming.
Just recently, executives of the media group informed analysts of
their expectations that a deal with Univision will be closed by
June. Analysts revealed that the group wants to increase its
ownership both in Univision and in the share of Univision
earnings it gets, but without any cash changing hands.




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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