---

       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, June 6, 2001, Vol. 2, Issue 110

                           Headlines


A R G E N T I N A

AEROLINEAS ARGENTINAS: SEPI Makes Final Offer To Workers
AEROLINEAS ARGENTINAS: Argentine Govt. To Inject 16.2M Pesos
ANDRE GROUP: To Sell Argentine Business To Bunge


B A R B A D O S

LIAT LTD.: CEO Calls For Cooperation Among Regional Airlines


B R A Z I L

CVRD: Auctions Cenibra Stake On June 5, 2001
CVRD: Announces Strategy To Cope With Electrical Energy Rationing
LIGHT: Power Rationing Program To Harm Income


C H I L E

TELEFONICA CTC: Launches Major Restructuring Plan


G U Y A N A

GA 2000: Passengers Want Govt. To Offer Better Deals


M E X I C O

AEROMEXICO: Flight Attendants Accept New Contract, End Strike
BANCRECER: IPAB Selling Home Mortgages Monday
BUFETE: Bolanos' Acquisition Likely To Happen By Mid-June
CINTRA: Two Leading Carriers To Be Sold As Separate Units
SATMEX: Not Concerned By Its Current Financial Situation
SAVIA: ING Acquires Control In Seguros Comercial America
SAVIA: Bright Future Awaits Seminis, Romo Says


     - - - - - - - - - - -


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

AEROLINEAS ARGENTINAS: SEPI Makes Final Offer To Workers
--------------------------------------------------------
Spain, Aerolineas Argentinas' majority shareholder will no longer
negotiate with union leaders, who have remained defiant to its
plan to rescue Argentina's biggest airline, Bloomberg reported
Monday. Instead, it will call a referendum and ask workers
directly whether they accept the plan that will save their jobs
for at least two years in return for cuts in benefits like
overtime and travel expenses. The workers' acceptance will see
Spain, via holding company SEPI, injecting $350 million into the
ailing carrier.

Mechanics and the flight attendant unions have rejected the cost-
cutting plan, after strike action and months of negotiations with
Spain. The 50-year-old carrier has been hurt by three years of
recession, mismanagement and increased costs that added to its
$900 million in debt and $1 billion in losses since the Argentine
government sold the bulk of the airline a decade ago.


AEROLINEAS ARGENTINAS: Argentine Govt. To Inject 16.2M Pesos
------------------------------------------------------------
Economy Minister Domingo Cavallo says the Argentine government
agreed to deposit June 1 its 16.2-million-peso minority capital
subscription in the struggling carrier Aerolineas Argentinas SA,
according to an AFX Press. Aerolineas Argentinas is a unit of
Spain's state-owned Sociedad Estatal de Participaciones
Industriales (SEPI). The purpose of the money is to allow the
payment of April wages to 7,000 workers, Cavallo announced. He
also said that President Fernando de la Rua has requested that
Labor Minister Patricia Bullrich "ensures (the funds) are used
for the company to meet its obligations with personnel." Cavallo
reiterated that "the (Argentine) state will not take over the
company", however, it will "regulate the commercial air system."


ANDRE GROUP: To Sell Argentine Business To Bunge
------------------------------------------------
Swiss wholesale group Andre, which has been battered with heavy
losses over the past two years, reached an agreement to sell its
Argentinean activities to White Plains, New York-based Bunge
International Ltd., L'Agefi Suisse reported last week. In
addition, the leading grain trader also made an announcement that
it has sold all of its Asian activities to Hong Kong group Noble.
The group's site in Lausanne will also be sold by the end of this
year leading to the loss of 175 jobs. Finally, Andre's European
subsidiaries are also up for sale. Andre announced a
restructuring program in early January and the sale of its
activities in March.



===============
B A R B A D O S
===============

LIAT LTD.: CEO Calls For Cooperation Among Regional Airlines
------------------------------------------------------------
Gary Cullen, the CEO of debt-laden regional LIAT (1974) Ltd. is
calling for the cooperation of all regional airlines, Caribbean
News Agency reported Friday. Speaking at the official launch of
Barbados as LIAT's hub in the region, Cullen suggested that all
airlines must work together in order to create sufficient
"critical mass" to compete with the international airlines.

"When airlines like Swissair, Sabena and Alitalia and indeed my
previous employers, Aer Lingus, believe they cannot survive on
their own, what chance has a tiny LIAT or indeed the bigger
carriers of the region," Cullen asked.



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

CVRD: Auctions Cenibra Stake On June 5, 2001
---------------------------------------------
Companhia Vale do Rio Doce (CVRD) will auction its 51.48 percent
ownership in Brazilian cellulose company Cenibra, including 50.67
percent of its common stocks, South American Business Information
reported Monday. Prediction among analysts is that the sale of
one of Brazil's biggest pulp companies could gather up to US$600
million in revenues for CVRD. The deal, however, will depend on
JBP (Japan Brazil Paper Pulp Resources), which holds a 48.52-
percent stake and has the rights of first refusal in the pulp
producer.

Cenibra's shares will be disputed by Aracruz, VCP, Suzano and
UPM-Kymmene, the strongest candidate being VCP. However, Aracruz
and VCP announced earlier they will join forces in bidding for
CVRD's stake in Cenibra.

After selling off Cenibra, CVRD will divest its stakes in
Floresta Rio Doce (99.85 percent) and Celmar (85 percent) by the
first week of July.


CVRD: Announces Strategy To Cope With Electrical Energy Rationing
-----------------------------------------------------------------
Companhia Vale do Rio Doce (CVRD) announces its strategy to cope
with the electrical energy rationing in the Northeastern,
Southeastern and Center Western regions of Brazil and the main
effects on its activities. It is important to stress that CVRD is
still waiting for some definitions of the Brazilian government to
have a clearer assessment of the rationing on its operations and
to adopt additional measures to protect its performance.

The main purpose is to prevent any disruption of the activities
of its core businesses -- iron ore mining, pellets, railroad and
port services -- that account for approximately 90% of its
revenues in order to continue to meet all its commercial
commitments.

Fifty-five electricity generators fueled by diesel oil were
rented to provide the energy supply required by CVRD, its
subsidiaries, affiliates and joint ventures that produce non-
energy intensive products. Therefore gold and potash mining will
have no disruptions as well.

The effect on energy intensive products:

To comply with the targets fixed by the rationing plan, ferro
alloys output will be reduced by 46,000 tonnes, from 220,000
tonnes to 174,000 over the next six months (June 1 to November
30, 2001). The estimated revenue loss is US$ 26 million.
Production will be sufficient to supply CVRD clients in Brazil
and Latin America, its main ferro alloys markets.

By the same token, aluminum production by Valesul, a smelter
located in the state of Rio de Janeiro, will be reduced by 25%.
Valesul will cut the production of ingots, a commodity traded on
the London Metal Exchange. It will preserve the production of
higher value added products, like alloys and billets, that are
sold under contracts with customers. Valesul is 54.51% owned by
Aluvale, a subsidiary of CVRD, has a 94,000 tonnes per year
capacity. In the first quarter of 2001, it contributed, through
an equity income of R$ 4.2 million, with 0.63% of CVRD net
earnings.

CVRD energy investments

CVRD is committed to invest a substantial amount of funds in
energy generation. Currently, it participates in seven projects.

The Igarapava hydroelectric power plant is under full operation
since August 1999, the Porto Estrela power plant will start
operations in September 2001 and Aimores, Candonga, Funil, Capim
Branco I and Capim Branco II are under construction. These plants
will be operating until late 2004. Estimated investment in this
seven power plants is US$ 446 million. Their total capacity will
be 1,422 MW and CVRD average share in these projects is 46%.

In 2004, given these seven power plants and other existing self
generating projects, the CVRD group will be able to provide an
electricity supply of 4.5 TWh per year, which corresponds to
32.1% of its total consumption in 2000, 13.9 TWh.

CVRD is performing engineering and environmental studies to bid
in auctions promoted by ANEEL, the Brazilian regulatory agency
for electrical energy, for concessions to build and operate
several hydroelectric power plants in the North and South of
Brazil. Simultaneously, it is involved in negotiations to build
thermoelectric power plants, fueled by natural gas and coal, in
the states of Mato Grosso do Sul, Espirito Santo and Maranhao.

Over the next five years, CVRD plans to invest up to US$ 2
billion in electrical energy generation to meet a substantial
portion of its needs at very low costs and to boost its
competitiveness in global markets.


LIGHT: Power Rationing Program To Harm Income
---------------------------------------------
The Brazilian power rationing program is expected to make a great
impact on Rio de Janeiro-based electricity distributor Light's
income, South American Business Information revealed Monday. The
plan harms the company that sells the majority of its production
to the residential segment. In the first quarter of this year,
sales in to residential customers represented 54 percent of the
company's income followed by the commercial sector with 26
percent and industrial with 15 percent.

Tough energy rationing measures took effect Monday with President
Fernando Henrique Cardoso calling on Brazilians to accept a
"challenge that demands a lot from all of us."

Cardoso also said that the government would roll back some of the
harsher penalties envisioned under the rationing plan, which
requires Brazilians to reduce consumption by 20 percent or face
hefty surcharges on their electricity bills and power cuts of up
to six days.



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

TELEFONICA CTC: Launches Major Restructuring Plan
-------------------------------------------------
Following two consecutive years of heavy losses, Chile's largest
telco, Telefonica CTC Chile, began a major restructuring plan on
Friday, Business News Americas reported Monday. The plan, which
is aimed at restoring the company's financial health, calls for
the merger of the e-business division with systems management,
the elimination of the Judicial Affairs department and
outsourcing of public relations activities. Additionally, over
1,000 of the 4,600 employees at the company's central office will
be terminated. However, speculation persists that the total job
cuts figure could reach 1,500. CTC's subsidiaries, which employ
another 4,600 people, could also see workforce reductions. On
Friday, 40 union members staged a peaceful sit-in at CTC's old
corporate office to protest the job cuts and alleged violations
of the labor code.



===========
G U Y A N A
===========

GA 2000: Passengers Want Govt. To Offer Better Deals
----------------------------------------------------
It's been two weeks since Guyana's national airline, GA 2000,
declared a temporary suspension of operations, but up until now,
passengers and tourism officials are still complaining, according
to a report Sunday in Caribbean News Agency. The transfer of GA
2000 passengers to other carriers, including BWIA and North
American Airlines, apparently did not work out satisfactorily
since a lot of passengers still grumble about being stranded and
not getting their refunds.

One customer described his experience as "a nightmare" and called
on the government, which has a 49 percent stake in the airline,
to give the stranded passengers a better deal. GA 2000 is widely
believed to be in financial trouble and is seeking a strategic
partner.



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

AEROMEXICO: Flight Attendants Accept New Contract, End Strike
-------------------------------------------------------------
Mexican airline Aeromexico ended a two-day strike, which stranded
thousands of passengers, when flight attendants accepted a new
contract on Saturday, according to an EFE News Service report.
The new contract will raise wages by 9.5 percent. Aeromexico had
initially offered a 6.5-percent salary increase, while the union
had sought a 30-percent increase. Saturday's agreement was
reached after more than six hours of negotiations.

Aeromexico president Alfonso Paquel said the flight attendants
compromise would preserve the financial health of the leading
airline in Mexico, with a 42 percent share of the domestic market
and a 20 percent share of flights abroad. The strike led to the
cancellation of 640 flights and losses of $10.6 million last
weekend.


BANCRECER: IPAB Selling Home Mortgages Monday
---------------------------------------------
The sale process of the 5,934 home mortgages administered by
government-intervened bank Bancrecer got underway on Monday,
Mexican bank bailout agency IPAB announced in a
Reforma/Infolatina report. The home mortgages, which are all
denominated either in pesos or in inflation-indexed investment
units (UDIs). The contracts are mostly past-due and have a
combined book value of 2 billion pesos. The proceeds from the
sale of the mortgages - divided into six packages - would be
placed against the costs of Bancrecer's rescue, the bailout
agency suggested.

"Those interested in participating in the tender process will be
able to present bids for one or more of the packages on offer,"
IPAB said. The sale of the home mortgages is part of IPAB's so-
called Asset Recovery Program for the current year.


BUFETE: Bolanos' Acquisition Likely To Happen By Mid-June
---------------------------------------------------------
Mexican construction company Bufete Industrial is expected to
cough up 3 million pesos in back-pay to its 400 employees and
give workers the remaining balance 15 days later, when Serbo's
Sergio Bolanos formally acquires the company. The plan was
revealed in a report Monday in Reforma/Infolatina by Bufete
Chairman and CEO Jose Mendoza Fernandez, who is also a founder of
the struggling company. Mendoza denied that he personally would
receive any kickbacks or under-the-table payments as a result of
the sale. However, he admitted he would be working for Bolanos as
a consultant. Bufete, which used to be one of Latin America's
largest engineering and construction firms, currently has
liabilities estimated at US$450 million.


CINTRA: Two Leading Carriers To Be Sold As Separate Units
---------------------------------------------------------
The Mexican government's planned sale of its majority stake in
airline holding company Cintra will see the two most important
national airlines, Aeromexico and Mexicana, currently under its
umbrella, sold in separate tender offerings. The latest plan was
revealed by Mexican Communications and Transport Minister Pedro
Cerisola in an El Economista/Infolatina report published Monday,
explaining that the Federal Competition Commission (CFC) resolved
to hold separate offerings for the companies in order to prevent
a possible monopoly. Cerisola noted that Cintra will disappear
once Mexicana and Aeromexico are privatized, and he insisted that
the "best offer" would be accepted to ensure the future
prosperity of the airline companies.

"We must provide the talent and sufficient support so that, if
they are sold separately, the airlines' development is carried
out in a healthy manner and predatory actions are prevented," he
commented.

Mexico's antitrust agency CFC, last year ruled that Cintra, which
controls more than 70-percent of the country's air transport
market, should be broken up and sold, but criticism of the sale
plans by Mexico's opposition-controlled Congress earlier this
year saw the sale process placed on hold until September.


SATMEX: Not Concerned By Its Current Financial Situation
--------------------------------------------------------
The current financial situation at Mexican satellite
communications company Satelites Mexicanos (Satmex), which has
raised concerns from some analysts and investors, doesn't bother
the company at all, Reforma/Infolatina reported Monday. According
to the company, it still has enough cash flow to cover existing
obligations, despite going into significant debt when it bought
its Morelos II, Solidaridad I and Solidaridad II satellites.
Currently, the company services the debt with annual interest
payments of US$60 million dollars. After making the interest
payment, Satmex reportedly still generates US$30 million dollars
in annual cash flow.

Just recently, Satmex denied it is a monopoly and declared it is
ready to compete with at least two firms that have applied for
authorization to handle in Mexico signals relayed by foreign-
licensed satellites.

"We operate in 32 countries and we compete every day with GE,
PanAmSat and Intelsad," said company Executive President and CEO
Lauro Gonzalex, in response to the allegations made by
unidentified sources at Pegaso.


SAVIA: ING Acquires Control In Seguros Comercial America
--------------------------------------------------------
Savia, S.A. de C.V. (NYSE: VAI) (BMV: SAVIA) today announced that
it has reached a final agreement with ING Group (NYSE: ING) under
which the Dutch company will acquire all of the remaining
outstanding shares of the subsidiary that holds Seguros Comercial
America (SCA) for a total consideration of US$791 million. This
amount was based on an enterprise value of US$1,750 million.
After the deal closes, ING will own 86.69 percent of the share
capital of SCA. The remaining 13.31 percent is publicly traded.
This agreement is subject to the approval of the Mexican
authorities and Savia's Shareholders.

Alfonso Romo Garza, Chairman of the Board of Directors and CEO of
Savia, commented: "The divestiture of our SCA and Empaques
Ponderosa subsidiaries will permit us to reduce Savia's debt by
approximately one billion dollars, leaving the Company with only
US$75 million dollars in debt. This transaction, together with
Seminis' debt restructuring, will allow Savia to be in full
compliance with all its financial obligations. Seminis has the
capacity to internally generate the necessary positive cash flow
to meet its obligations, and will not require new capital. The
actions taken at Seminis will enable it to return to
profitability and become a strong cash generator." Mr. Romo
added: "A strengthened balance sheet will allow us to focus on
reaffirming our global leadership in our high-potential
Agrotechnology business, in which we play a strategic role in the
food chain, along with Monsanto, DuPont and Syngenta."

Under Mr. Romo's management, SCA increased its market share to 29
percent in 2000, up from eight percent in 1989. SCA has held a
market leadership position since 1996 and its increasing
performance levels have allowed it to become a highly efficient
insurance company reporting combined ratios comparable to those
of the best insurance companies in the world. SCA's subsidiaries
compose a wide array of profitable financial services companies.
Among them, the leasing, factoring, mortgage and surety bonds
operations have been awarded top ratings by Standard & Poors. SCA
and its subsidiaries represent a solid growth platform for ING in
Mexico.

Seguros Comercial America will benefit from the global experience
and presence of the ING Group and strengthen its strategic
position vis-a-vis the globalization of the financial services
sector in Mexico. At the request of the ING Group, Alfonso Romo
Garza will assume a strategic consultant role with ING Americas
and will continue in his current capacity of Chairman of the
Board of Directors of Seguros Comercial America and Adrian Paez
will remain as the COO.

ING Group is headquartered in Amsterdam, the Netherlands and
employs more than 100,000 people globally, operates in 65
countries and currently has total assets under management of
US$453 billion. The global focus is to provide integrated
financial service solutions to its customers to meet their
changing needs in this new millennium.


SAVIA: Bright Future Awaits Seminis, Romo Says
----------------------------------------------
Alfonso Romo, chairman of Mexico's Grupo Pulsar and Grupo Savia,
expressed optimism regarding the future of its U.S.-based agro-
biotechnology subsidiary Seminis, Inc., Reforma/Infolatina
reported Monday. Seminis, which recently obtained approval from
its bank creditors to restructure US$310 million in debt, is a
viable business and will be successful in the future, Romo
confidently said.

Management at Seminis, one of the world's leading producers of
fruit and vegetable seeds, also remains upbeat.

"Seminis is a star. What we've done - which is to create, in a
short period, a global company - is like finding a diamond that
weighs one kilogram," according to Seminis CEO Eugenio Najera.
"The company is viable. It has potential. In addition to being
the leader, it will achieve positive results," Najera said.




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
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

The TCR Latin America subscription rate is $575 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are $25 each.  For subscription information,
contact Christopher Beard at 301/951-6400.


* * * End of Transmission * * *