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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

            Friday, May 25, 2001, Vol. 2, Issue 103

                           Headlines



A R G E N T I N A

AEROLINEAS ARGENTINAS: Gov. Grants P$16 Million To Pay Workers


B R A Z I L

CESP: CTEE Bondholders Remain Calm Despite Energy Crisis
VARIG: Losses Increase In The First Quarter Of This Year
XEROX: Shares Fell Amid Widening Probe On Accounting Practices


M E X I C O

ATLANTICO: Bital's Acquisition Put On Hold
BANCRECER: IPAB Reconsiders Sale Scheme
GOODYEAR: Defends Current Share In The Mexican Market
GRUPO PULSAR: Expects To Garner $750M From Sale Of Seguros
GRUPO TELEVISA: Publishing Division Has New CFO
GRUPO TELEVISA: Televisa, Acir To Challenge CFC's Ruling
GRUPO TELEVISA: Establishes Partnership With Colombian Publisher
SAVIA: Analysts Say Company In Dire Need Of $2 Billion


U R U G U A Y

SUDAMTEX: Files For Judicial Liquidation


V E N E Z U E L A

SIDOR: Hylsamex, TAMSA Welcome Employees' Decision To End Strike
SIDOR: Kicks Off Internal Audit
SIVENSA: To Sell Danaven Stake Soon
SIVENSA: May Reach Agreement With Bank Creditors By Year-End


     - - - - - - - - - -


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

AEROLINEAS ARGENTINAS: Gov. Grants P$16 Million To Pay Workers
--------------------------------------------------------------
The Argentinean government will grant 16.2 million pesos to
Aerolineas Argentinas in order to ease a wages crisis at the
airline, AFX-Europe reported Wednesday. The money corresponds to
the sum the government was due to contribute toward the airline's
recapitalization this year and in 2002.

Majority shareholder Sociedad Estatal de Participaciones
Industriales (Sepi), which controls 80 per cent of the airline,
earlier refused to pay the April wages of Aerolineas staff saying
it does not have sufficient funds to pay the money owed to 6,760
employees.

The Argentinean government will continue to work at finding an
exit to the current crisis in an effort to avoid liquidation of
the company.



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

CESP: CTEE Bondholders Remain Calm Despite Energy Crisis
--------------------------------------------------------
Holders of Cesp-issued CTEE bonds remain calm despite the current
Brazilian energy crisis. Current conditions sees government-
organized black outs as imminent, South American Business
Information reported Wednesday. These bonds have a secured
minimum profitability and are tied to financial indexes or the
energy tariff.

Cesp has issued R$700 million worth of CTEE bonds since 1998,
with the last two issuances totaling R$572 million. These were
used to construct the Usina Sergio Mota (formerly Porto
Primavera) power plant at Sao Paulo state, with a capacity for
1,814 Mw. The largest holder of CTEE is Camargo Correa
construction company with a portfolio of R$300 million worth of
bonds.


VARIG: Losses Increase In The First Quarter Of This Year
--------------------------------------------------------
Brazilian airlines Varig announced that losses in the first
quarter of this year increased by R$18 million, to R$196.3
million compared to the same year-ago period, South American
Business Information reported Wednesday. The airline's passenger
transportation increased by 2.4 percent over the period, while
VarigLog's cargo transportation increased by 8.6 percent. Its
regional airline Rio Sul reported losses of R$3.75 million for
the 1st quarter of this year. According to Varig, its US$1.3-
billion debt generated financial losses of R$196.3 million in the
first quarter of this year, up R$16.1 million from losses in the
same period in the previous year.


XEROX: Shares Fell Amid Widening Probe On Accounting Practices
--------------------------------------------------------------
Shares of Xerox Corp. fell as much as 9 percent Tuesday amid
reports that the U.S. Securities and Exchange Commission has
widened its investigation into accounting practices, according to
a Europe Intelligence Wire report Wednesday. The SEC has
subpoenaed Citibank for records of transactions at Xerox's Brazil
unit.

James Bingham, a former assistant treasurer at Xerox, claims the
company may have improperly recorded about US$140-million in
sales and US$80-million in pretax profit in the second and third
quarters of 1999 from transactions which were designated as sales
to the bank.

According to Christa Carone, a spokeswoman for Xerox, the company
has already disclosed details of its operations and she defended
its banking practices.

"The transactions were absolutely in compliance with generally
accepted accounting principles," she said.

There is no indication Citibank did anything improper in
arranging the transactions for Xerox. Mr. Bingham told the SEC
that Xerox executives sought the transactions to hide the firm's
poor performance by booking sales at once, instead of over
several years.



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

ATLANTICO: Bital's Acquisition Put On Hold
------------------------------------------
Mexico's Ministry of Administrative Development has requested a
temporary delay of bank bailout agency IPAB's plans to inject an
estimated $1.3 billion into government-intervened Banco
Atlantico. According to a report Wednesday in Reforma/Infolatina,
President Vicente Fox's administration wants to conduct a
thorough investigation on the proposed arrangements between the
agency and Grupo Financiero Bital regarding the recapitalization
of Atlantico, which is now in the process of being acquired by
Bital. The administration's move was triggered by public outcry
against a 90-billion-peso debt (around US$8.2 billion ) that IPAB
will owe U.S.-based Citigroup, after it acquires Grupo Financiero
Banamex Accival for $12.5 billion in cash and stock. The
administration's move is seen by many as motivated by
expectations Bital itself will be acquired by a foreign-owned
bank shortly after it completes its drawn-out acquisition of
Atlantico.


BANCRECER: IPAB Reconsiders Sale Scheme
---------------------------------------
Last week's announcement by U.S.-based Citigroup that it will pay
$12.5 billion in cash and stock for Grupo Financiero Banamex
Accival (Banacci) has led Mexican bank bailout agency IPAB to put
on hold its plans to auction off government-intervened Bancrecer,
according to a report Wednesday in Reforma/Infolatina. The amount
for which Citigroup has agreed to pay for Banacci - estimated to
be 2.8 times its book value - has propelled IPAB to reconsider
how best to maximize the proceeds it can garner from selling
Bancrecer. A top-level meeting at IPAB next week reportedly will
address the issue. Meanwhile, the agency is still planning to
invite formal expressions of interest from potential buyers next
week. Observers believe IPAB's plans may well be postponed to
allow it to reorganize the sale.


GOODYEAR: Defends Current Share In The Mexican Market
-----------------------------------------------------
In a bid to defend its current share in the Mexican market after
closing down its plant in Mexico city, Goodyear will be importing
tires from plants in the United States, Canada and some Latin
American countries, Infolatina reported Wednesday. According to
company representatives, Pilar Bernal and Jorge de Regil, the
company has not made any decision yet regarding the disposal of
the assets from the already closed plant. Company officials said
that the current priority in Mexico is to meet demand from its
local clients and continue operations at its plant in the city of
Cuernavaca, in the central state of Morelos.


GRUPO PULSAR: Expects To Garner $750M From Sale Of Seguros
----------------------------------------------------------
Struggling Mexican conglomerate Grupo Pulsar expects to generate
somewhere between $700 - $750 million dollars from the sale of
its remaining 57-percent stake in Seguros Comercial America SA,
Mexico's No. 1 insurance company. Pulsar plans to sell the
position to ING Groep NV, the largest Dutch financial services
company, Reforma/Infolatina reported Wednesday. Proceeds from the
sale of Seguros will be used to pay down Savia's estimated debts
of $1.8 billion. Savia is a holding company for Monterrey-based
Pulsar's agro-biotechnology businesses, which include Seminis,
one of the world's leading producers of fruit and vegetable
seeds. Savia's shareholders are scheduled to meet June 1 to
approve a debt-restructuring plan.

ING holds the remaining 43-percent stake in Seguros Comercial
America, with the entire company valued at around $2.3 billion.


GRUPO TELEVISA: Publishing Division Has New CFO
-----------------------------------------------
Editorial Televisa, the struggling publishing division of Mexican
media giant Grupo Televisa, now has a new Chief Executive
Officer, Reforma/Infolatina reported Wednesday. Sergio Carrera
will replace Gerardo Mora in the post. Carrera has been given the
task of managing a new project that will allow advertisers to
purchase space in Televisa-published magazines using an automated
system. Editorial, which has reported poor performance in the
first quarter, is currently up for sale.


GRUPO TELEVISA: Televisa, Acir To Challenge CFC's Ruling
--------------------------------------------------------
A ruling by Mexican antitrust agency the Federal Competition
Commission (CFC) has prompted Mexican media giant Grupo Televisa,
local broadcast-radio group Acir, and U.S.-based Acir partner
Clear Channel to lodge an all-out legal assault,
Reforma/Infolatina said Wednesday. The CFC's ruling will
reportedly block the planned merger between Acir and Televisa
subsidiary Radiopolis. Televisa has already hired high-profile
Mexican law firm Aguinaco, Zaldivar & Aramburu to challenge the
ruling in the Mexican courts. Proceedings on a formal appeal are
expected to be launched early next week.

On the other hand, Clear Channel also looks set on hiring a team
of lawyers in the United States, where the ruling will be
contested under the terms of the North American Free Trade
Agreement (NAFTA). The terms of the said agreement include
protection and guarantees for U.S foreign investors in Mexico
such as Clear Channel, which owns a stake in Acir.


GRUPO TELEVISA: Establishes Partnership With Colombian Publisher
----------------------------------------------------------------
Televisa, the largest Spanish-speaking communications company in
the world, established a partnership with the Colombian publisher
Abrenuncio to launch a Mexican edition of the magazine Cambio in
June, according to an EFE report. On Tuesday, Televisa chief
Emilio Azcarraga and Nobel Prize-winning Colombian writer Gabriel
Garcia Marquez signed an agreement, which will see the creation
of the Mexican edition of the magazine with journalist Ramon
Alberto Garza as editor.

"The magazine will be a weekly general interest magazine that
will include political, business, technology, cultural and
lifestyle information and analysis focusing on Mexico with a
global vision," according to Televisa.

Cambio was first created in 1993 as the Colombian edition of the
magazine Cambio 16, owned by Spain's Grupo 16. In 1996, it became
a purely Colombian publication when it was bought by a group of
journalists led by Garcia Marquez. At present, it is being sold
in the United States, Venezuela, Ecuador and Panama as well as in
Colombia.

According to spokesmen for Cambio in Colombia, the initial
investment for the Mexican edition will be $5 million and that
50,000 copies will be printed, with the number rising to 70,000
at the end of the first six months of operations.


SAVIA: Analysts Say Company In Dire Need Of $2 Billion
------------------------------------------------------
According to some local analysts, Savia, a Mexican agro-
biotechnology subsidiary of Monterrey-based Grupo Pulsar, is in
need of an estimated amount of $2 billion in order to dodge a
potential bankruptcy proceeding, Infolatina reported Wednesday.
Savia, which currently faces a $1.8 billion debt, must succeed in
dealing restructuring its liabilities, as well as improving its
operating results. Otherwise, the company will be forced to file
for bankruptcy before the end of the current year. Savia's sales
during the first quarter were down 1.6 percent. Grupo Pulsar has
already launched a major divestment program in order to come up
with the cash needed to bail out Savia. Savia's liabilities
reportedly are the result of over-investment in subsidiary
Seminis, one of the world's leading producers of fruit and
vegetable seeds.



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

SUDAMTEX: Files For Judicial Liquidation
----------------------------------------
Uruguayan textile company Sudamtex SA, which had losses of US$6
million in the period of July 2000-March 2001 and a total debt of
US$30 million, applied for judicial liquidation, South American
Business Information reported Wednesday. The creditors of the
US$30mil are the bank BROU, a series of private banks and also
holders of negotiable bonds of US$2.4 million. Sudamtex, which
employed 570 employees, announced a merger with its main
Argentinean competitor INTA five months earlier, however the
transaction never succeeded.



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

SIDOR: Hylsamex, TAMSA Welcome Employees' Decision To End Strike
----------------------------------------------------------------
Mexican steelmakers Hyslamex, a subsidiary of Monterrey-based
Grupo Alfa, and TAMSA have welcomed a decision by employees at
leading Venezuelan steelmaker Sidor to end their strike and
return to work, Infolatina revealed Wednesday. Hyslamex and TAMSA
are part of the Amazonia consortium, which bought 70 percent of
the steelworks when it was privatized in 1997. The strike at
Sidor, which lasted for 22 days, has cost the Mexican-owned
companies an estimated total of between $44 and $63 million.

Other companies which are also part of the consortium are,
Brazil's Usiminas, Argentina's Siderar, and Venezuela's Sivensa.


SIDOR: Kicks Off Internal Audit
-------------------------------
An investigation at the Venezuelan integrated steelmaker Sidor by
an internal auditor is now underway, Business News Americas
reported Wednesday. The investigation is being conducted to
establish the extent of damage to the equipment following the 22-
day strike that ended Tuesday.

"We know that their could be problems in the steelmill, but it is
necessary to carry out a very exhaustive audit to determine what
state the installations are really in," company spokesperson
Maria Eugenia Salazar told BNamericas.com.

If the equipment is in good condition the check will take around
six days, if not then the audit will take longer, she said.

The strike ended when the steelmaker signed an agreement with
union leaders. Terms of the agreement include: a US$2,940 bonus
per worker to be paid over three installments between September
and February; the start of collective agreement talks from
January 8 and a year's job security for workers; and a pre-
privatization base for profit calculations.

"The key issue in the strike was workers' dignity, which demands
respect on the company's part, and we achieved that with this
fight," said Ramon Machuca, leader of the Sutiss union grouping.


SIVENSA: To Sell Danaven Stake Soon
-----------------------------------
Venezuelan iron and steel group Sivensa is now close to selling
its 51 percent share in auto parts manufacturer Danaven to US-
based Dana Corporation. Sivensa is taking the action in a bid to
reduce the group's estimated US$264-million debt, Business News
Americas reported Wednesday. Dana already holds the other 49
percent in Danaven.

"We are still waiting for the final approval from the banks
before completing the sale and releasing the figure," Sivensa
spokesperson Isabel Camejo said. Dana will also assume Danaven's
debt as part of the deal. Danaven is based in the city of
Valencia in northern Venezuela's Carabob state.

Meanwhile, talks continue between Sivensa's IBH division,
Australia's BHP and the banks in an effort to overcome financial
problems at Orinoco Iron hot-briquette iron plant in Puerto
Ordaz, which IBH and BHP equally own. Initial technical start-up
problems last year meant debts have mounted rapidly. Melbourne-
based BHP, which is writing off US$410 million in the project,
has said it will not put up any fresh capital into the company.
Subsequently, Orinoco Iron has defaulted on loan repayments.

"Following modifications, it is now clear that operationally the
plant has no problems with regard to technology. It has proven
itself and been given a good report by the engineers," said
Camejo. However, the iron plant needs an estimated US$220 million
capital injection to install equipment and complete modifications
to overcome the technological problems, she added.


SIVENSA: May Reach Agreement With Bank Creditors By Year-End
------------------------------------------------------------
Siderurgica Venezolana Sivensa expects to reach an agreement with
its bank creditors to restructure $253 million by year-end,
according to a report Wednesday in Bloomberg. Sivensa has been
reporting losses in the last nine consecutive quarters. In
November, it initiated talks with a pool of banks including
Banque Paribas, Citicorp Securities, ING Barings and Deutsche
Morgan Grenfell. Each of these banks loaned Sivensa $50 million
in 1998 to help it refinance short-term debt assumed for the
December 1997 purchase of the loss-making integrated steelmaker
Sidor. The entire refinancing involves 16 banks.




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
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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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