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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, July 27, 2001, Vol. 2, Issue 146

                           Headlines


A R G E N T I N A

AEROLINEAS ARGENTINAS: Eurnekian Flip-Flops On Previous Bid
AUSTRAL: Defers Decision Over Receivership Filing


B R A Z I L

BANCO ECONOMICO: CB Sells Copene Stake To Odebrecht, Mariani
BARRAMAR: Creditors Get Injunction To Ensure Recovery
TRANSBRASIL: Suspending Flights Due To Lack Of Passengers
VARIG: Seeks 22% Ticket Price Hike To Offset Fuel Prices


C H I L E

STARMEDIA: Sets Up Alliance With EresMas.com


E C U A D O R

FILANBANCO: No Banking Holiday, Says Regulator


M E X I C O

BANCRECER: German Firms To Pay IPAB P$911M For 51% Afore Stake
BANCRECER: IPAB Selling P$2Bln Mortgage Portfolio For P$412M
CINTRA: Delta Hires Salomon Brothers To Advise On Aeromexico Bid
CINTRA: Registers $25M 2Q01 Loss Due To Low Fares, June Strike
GRUPO IMSA: Announces 2Q01 Results; Unaffected by Strike
GRUPO TRIBASA: Annual Reports Hinge On Restructuring Completion
TELECOM AMERICAS: American Movil In Creditor Refinancing Talks


P E R U

NUEVO MUNDO: Regulator Seeks To Overturn Court Ruling


U R U G U A Y

PLUNA: Financial Woes Seen Affecting Brazil's Varig


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

AEROLINEAS ARGENTINAS: Eurnekian Flip-Flops On Previous Bid
-----------------------------------------------------------
In a sudden turn of events, Argentine businessman Eduardo
Eurnekian says he has withdrawn his previous bid and has no
interest in acquiring a stake in the beleaguered Argentine
airline Aerolineas Argentinas and its spin-off domestic carrier,
Austral. According to Eurnekian, he has already informed the
Spanish state holding company SEPI, a majority stakeholder in
Aerolineas, that he was not interested and that he felt only the
state could resolve the crisis that has brought the airline to
the brink of bankruptcy.

"If Aerolineas goes under I'd be very sorry and it would be a
shame. But I'd prefer to see it become Argentinalized. I don't
feel the solution lies in some other foreign company buying it. I
would be upset if LAN Chile or Brazil's TAM were to acquire it,"
he said.

Last month, Aerolineas filed for bankruptcy protection after SEPI
said it would no longer assume responsibility for its $ 900
million debt backlog and $363 million in annual losses after
several of the unions representing airline workers refused to
accept its restructuring plan.



AUSTRAL: Defers Decision Over Receivership Filing
-------------------------------------------------
Austral, the domestic airline unit of Aerolineas Argentinas, has
delayed its decision over filing for receivership to allow more
time to study the move, reported AFX Europe Wednesday. However,
according to reports, the decision could be based on the fact
that there are court holidays until the middle of August in
Argentina and ongoing deliberations by SEPI over the sale of
Aerolineas to one of seven groups offering to buy it.

Austral was privatized in 1987 and its capital decreased from
US$68 million in 1994 to US$42 million in 1999. That same year,
Aerolineas Argentinas started to sell Austral's tickets.



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

BANCO ECONOMICO: CB Sells Copene Stake To Odebrecht, Mariani
------------------------------------------------------------
Brazilian engineering and chemical groups, Odebrecht and Mariani,
on Wednesday emerged as the successful bidders in the acquisition
of Copene's control after two other bidders dropped out, ft.com
revealed in a report. The two companies bought a stake from
Brazil's central bank in the controlling group of Copene, in
which they were already shareholders, for the minimum price of
R$735 million (US$296m).

The sale is a further step in the untangling of a complex
shareholder structure in the country's large chemical companies.
Copene has 10 main shareholder groups and the recent acquisition
is expected to considerably improve its decision-making process.
Uncertainty over the company's future had stalled investments in
numerous nearby chemical plants it supplies with raw materials.

Wednesday's auction was the central bank's third attempt to sell
the stake it had acquired in Copene through the bail-out of the
defaulted Banco Economico. The central bank said it would move to
sell a stake in Acominas, the steel manufacturer, and divest
Banco Economico in the first quarter of next year.


BARRAMAR: Creditors Get Injunction To Ensure Recovery
-----------------------------------------------------
Three of Barramar's creditors, Alcatel Telecomunicacoes, Pegasus
Telecom and Telefonica, obtained an injunction to ensure the
development of a project aimed at salvaging Barramar, South
American Business Information reported Friday. Barramar has 42
contracts with highway licensees to install and explore 16,350 km
of fiber optical lines. The Company is currently battling a
financial crisis with accumulated debts of R$650 million. Of the
total liabilities, R$300 million is owed to Alcatel, Pegasus, and
Telefonica.


TRANSBRASIL: Suspending Flights Due To Lack Of Passengers
---------------------------------------------------------
Struggling Brazilian airline Transbrasil says it will stop for an
indefinite period flights to the Brazilian cities of Cuiaba,
Goiania, Vitoria, Maceio, Natal, Sao Luis and Foz do Iguacu. In
addition, the company will cease flights to the Portuguese
capital Lisbon on 6 August 2001, O Globo - Brazil reported
Tuesday. Transbrasil's decision follows an 8-percent drop in the
number of passengers in the first half of this year brought about
by the difficulties that are affecting the air transport sector
as a whole.

General Electric Capital Corp. is trying to force Transbrasil
into bankruptcy in a dispute over payments on five airplanes that
the Brazilian carrier is leasing.


VARIG: Seeks 22% Ticket Price Hike To Offset Fuel Prices
--------------------------------------------------------
In the light of the 100-percent increase in fuel costs in the
last year and plane leases linked to the dollar, Brazil's Varig
requested a ticket price increase of 22 percent in airports
controlled by the government, Valor Economico reported July 20.
According to an industry source, the government appeared to be
considering an increase of 14 percent.

Varig is expecting less than satisfactory results for the first
half of the year, given the current economic problems, high
dollar and the 8 percent decline in international ticket sales.
There are signs that the debt-laden airline could seek a
strategic partner to help solve its financial woes.



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

STARMEDIA: Sets Up Alliance With EresMas.com
--------------------------------------------
EresMas.com, the Internet portal unit of Auna SA, reported
establishment of a strategic alliance with StarMedia Network Inc.
for the integration, distribution and sale of the Spanish
portal's content, AFX-Europe related Wednesday. EresMas, issued a
statement saying that the deal involves the distribution of 8
Eresmas vertical portals through StarMedia's network.

According to the Spanish portal, the agreement will "enable both
firms to take advantage of the burgeoning Latin American Internet
market." EresMas said profits from the deal will be "shared
between both companies."

Auna is the holding company, which manages Endesa SA, Union
Electrica Fenosa SA and Telecom Italia SpA's telecoms assets in
Spain.

StarMedia, just recently gave guidance that it expects to get out
of the red by the end of the year after getting a cash boost of
US$36 million. The funds are the result of an agreement with Bell
South in Latin America.



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E C U A D O R
=============

FILANBANCO: No Banking Holiday, Says Regulator
----------------------------------------------
Following the government's order to close Filanbanco, a state-run
bank that is being privatized, rumors surfaced that Ecuador's
banking system might be closed and a banking holiday would be
declared, EFE reported Wednesday. However, the country's chief
banking regulator, Miguel Davia, squelched the rumors.

"I want to categorically deny that there will be a banking
holiday. There is not nor will there be a banking holiday,"
Davila insisted, adding that the government is determined to
strengthen the banking system, especially state-run institutions.

Ecuador closed Filanbanco, which had had 23 percent of the
country's total banking assets, after its operation became
unsustainable due to growing losses and overdue loans. The bank,
which was founded in 1908, was taken over by the state in 1998 to
avert its collapse. Even with government intervention, the bank
posted losses of $104.8 million last year.

Some 20 private banks were transferred to government control in
1998 and 1999 amid a liquidity crisis that forced the closure of
several institutions and the implementation of a reorganization
program.



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

BANCRECER: German Firms To Pay IPAB P$911M For 51% Afore Stake
--------------------------------------------------------------
German firms Dresdner and Allianz will pay 911 million pesos to
Mexican bank bailout agency IPAB for a 47.5-percent stake in
Mexican pension fund manager Afore Bancrecer it won at the
auction and a 3.5-percent stake over which the firms held an
option following their earlier acquisition of a 49-percent stake
in the pension fund manager, Mexico City daily Reforma reported
Wednesday. Payment will be made on August 6 this year. The
transaction reportedly awaits approval by pension regulator, the
National Retirement Savings Commission (Consar). However,
Dresdner-Allianz is fully expected to take possession of its
stake in early September.


BANCRECER: IPAB Selling P$2Bln Mortgage Portfolio For P$412M
------------------------------------------------------------
Mexican bank bailout agency IPAB on Tuesday agreed to sell in
three packages a 2-billion-peso home-mortgage portfolio from
government-intervened bank Bancrecer for a total price of 411.5
million pesos, or an average of 25.7 percent of face value,
Mexico City daily Reforma said Wednesday in a report. Lone Star
earlier took four packages of the portfolio's total six, around
70 percent, while Auritec GE and Solida Banorte each took one
package. A further auction of Bancrecer's corporate loans worth a
total of 11 billion pesos will be staged in August.


CINTRA: Delta Hires Salomon Brothers To Advise On Aeromexico Bid
----------------------------------------------------------------
Word on the street suggests that Salomon Brothers is advising
Delta Airlines Inc. in its bid to acquire a minimum 25-percent
stake in leading Mexican airline Aeromexico. Along with its chief
competitor, Mexicana, Aeromexico is slated for privatization,
Mexico City daily Reforma reported Wednesday. Of all the
potential bidders eyeing the position in the Mexican carrier,
only Delta has so far expressed clear interest in Aeromexico.

Both Aeromexico and Mexicana are controlled by government-owned
holding company Cintra, which the administration of President
Vicente Fox intends to break up and sell. Mexican law currently
prohibits a foreign company to own more than 25-percent of the
country's airlines. However, the Fox administration shortly could
release details of proposed changes to the limit.


CINTRA: Registers $25M 2Q01 Loss Due To Low Fares, June Strike
--------------------------------------------------------------
Government-owned Mexican airline holding company Cintra suffered
a second-quarter loss of 225.9 million pesos (some $25 million),
according to an EFE News Service report Wednesday edition. The
holding company in part blames the shortfall, including a net
loss of 65 million pesos ($7 million), on low fares in the
Mexican market. Morever, Cintra indicated that a struggling U.S.
economy and a strike in early June by Aeromexico flight
attendants also hurt operations. Revenues in the period dropped
11.2 percent to 7 billion pesos ($777 million), as compared to
the second-quarter income in 2000.


GRUPO IMSA: Announces 2Q01 Results; Unaffected by Strike
--------------------------------------------------------
Mexican industrial conglomerate Grupo IMSA, which reported
US$10.5 million dollars in losses a month ago due to a picket
line set up at the group's steel-making plant in the northeastern
city of Monclova, on Wednesday announced results for the second
quarter of 2001.

2001 Second Quarter Highlights:

(Unless otherwise stated, all figures are presented in millions
of June 30, 2001, pesos (Ps), or in millions of nominal US
dollars (a) (US$)).

-- For the second quarter, revenues in nominal dollar terms rose
year-over-year by 4.8% to US$540, while decreasing in peso terms
by 2.1% to Ps 4,960.

-- IMSA ACERO's sales volume for the second quarter grew 11.9%
year-over-year and 1.1% quarter-over-quarter.

-- In the second quarter, ENERMEX's sales volume increased by
12.3% year-over-year. Significant growth is expected for the rest
of 2001 as a result of the incorporation of new clients.

-- For the second consecutive quarter, Grupo IMSA achieved an
increase in its operating margin, which rose from 9.0% in the
first quarter to 10.5% in the second quarter of 2001.

-- EBITDA increased year-over-year by 7.9% and quarter-over-
quarter by 17.5% in nominal dollar terms to US$82. In peso terms
EBITDA grew year-over-year by 1.5%. s

-- Majority net income reached Ps 528 in the second quarter of
2001, compared to Ps 241 in the previous quarter and a majority
net loss of Ps 71 in the same quarter of last year.

-- The Company's debt was reduced by US$21 during the quarter,
and by US$226 during the last twelve months.

-- Interest coverage, defined as EBITDA divided by net interest
expense, reached 5.4 times in the second quarter of 2001.

IMSA acquired the Monclova plant from former stated-owned
steelmaker Altos Hornos de Mexico in February 1999. The plant
reportedly has been plagued by labor-dispute problems ever since
the acquisition


GRUPO TRIBASA: Annual Reports Hinge On Restructuring Completion
---------------------------------------------------------------
Mexican construction company Grupo Tribasa reasoned that failure
to submit annual reports to the U.S. Securities and Exchange
Commission (SEC) for the past two years is due to the fact that
the debt-restructuring process launched in November 1999 has not
yet been concluded, COMTEX reported Wednesday.

"As soon as the said restructuring has been duly agreed, Grupo
Tribasa will issue a press bulletin and proceed, as swiftly as
possible, to present its annual reports (Form 20-F) for the
periods ending Dec. 31, 1999, and Dec. 31, 2000," the company
said.

A previous TCR-LA report indicated that Tribasa's efforts to
restructure its debts have met resistance as its creditors have
adopted a hostile attitude toward the company's moves. Creditors,
according to the report, are determined to force the financially
troubled company into bankruptcy, even to the point of
sacrificing everything owed to them by Tribasa, in order to force
such an outcome.


TELECOM AMERICAS: American Movil In Creditor Refinancing Talks
--------------------------------------------------------------
America Movil, the mobile spin-off of Mexican dominant telephone
carrier Telefonos de Mexico (Telmex), plans to start talks with
creditors to refinance about $2 billion in debt owed by its
Brazilian unit Telecom Americas Ltd., Bloomberg mentioned in a
report Wednesday. Carlos Garcia Moreno, the company's chief
financial officer and a former top finance ministry official, is
to travel to Brazil in coming days to begin negotiations with
local and foreign banks.

America Movil has a 44 percent stake in Telecom Americas, while
Canada's Bell Canada International Inc. has an identical stake.
SBC Communications Inc. owns the rest.



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P E R U
=======

NUEVO MUNDO: Regulator Seeks To Overturn Court Ruling
-----------------------------------------------------
Peru's banking regulator, which intervened Nuevo Mundo in
December 2000 after the local bank fell prey to a run on
deposits, will appeal a court ruling suspending the intervention,
Business News Americas said Wednesday in a report. The court
sided with the bank's majority shareholders, who sued to have the
intervention overturned. The ruling puts the regulator in an
awkward position because it is supposed to transfer control of
Nuevo Mundo to Banco Interamericano de Finanzas within a few
days. Interamericano had previously agreed to acquire the
intervened bank for an undisclosed sum.

The outcome of this case could affect the fate of NBK, another
Peruvian bank that collapsed during the financial turmoil after
former President Alberto Fujimori fled to Japan on charges of
incompetence. International consulting firms
PriceWaterhouseCoopers and Andersen are evaluating NBK with a
view toward its eventual transfer to local bank Financiero.



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

PLUNA: Financial Woes Seen Affecting Brazil's Varig
---------------------------------------------------
Uruguayan transportation company Pluna is facing financial
hardships, with debts reaching US$52 million, South American
Business Information reported Wednesday. The company has
accumulated losses of US$10 million between July 2000 and June
2001. Based on local regulations, Pluna will require a capital
subscription of US$5.2 million, according to its CEO, Mr. Jorge
Neves. The troubles at Pluna are also seen negatively affecting
the financial performance of the Brazilian airline Varig, which
has a 49-percent stake in the Uruguayan carrier.




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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