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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

            Tuesday, August 21, 2001, Vol. 2, Issue 163

                           Headlines


A R G E N T I N A

IMPSAT: Likely To Miss Payments Due To Argentine Recession
IMPSAT: Pescarmona Searching For A Financial Partner
IMPSAT: 2Q01 Results In Line, Lower Guidance Going Forward
IMPSAT: Salomon Cuts Recommendation, Price Target
MULTICANAL: Negotiates With Seven Banks To Avoid Default


B R A Z I L

BANESPA: BSCH Chairman May Sell Assets To Buy Banespa
CIMETAL: Reports 1H01 Losses; Asset Sales Insufficient For Debts
LIGHT: Losses Worsen; EDF To Take On US$1B Worth Of Projects


C H I L E

EDELNOR: Electroandina Increases Price Of Tender Offer
GENER: TotalFinaElf Proposes Tender, Solicitates HpdA Notes
MINERA CASCADA: Cruzat Finalizes Sale To Chilean Entrepreneurs


C O L O M B I A

BANCAFE: Still No Base Price Set From Council of Ministers


M E X I C O

AHMSA: GAN Restructuring Suffers Setback Due To Lawsuit
BANCRECER: Winning Bid To Be Announced September 24
GISSA: Plant Closure Not An Indication Of Financial Struggle
VITRO: Boasts 2-Year Contract With Coca-Cola


P A R A G U A Y

PETROPAR: CYCE's Audit Uncovers G$14B Of Bad Debts


P E R U

AEROCONTINENTE: Charged Officials Free Again



     - - - - - - - - - - -


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

IMPSAT: Likely To Miss Payments Due To Argentine Recession
----------------------------------------------------------
Impsat Fiber Networks Inc. is believed to approaching a default
on debt payments this year as Argentina remains mired in
recession and shunned by investors, Bloomberg said Friday. The
company earlier warned it would probably restructure debts as new
financing sources dried up, growth slowed and receivables from
some customers continue to age.

"The macroeconomic situation in Argentina forced a number of our
clients, including government agencies, to delay payments," said
Guillermo Jofre, Impsat CFO, refusing to provide details
regarding financing and payment dates.

Impsat has about $1 billion of debt, of which $75 million comes
due within 12 months, Jofre disclosed. The government, which is
slashing costs to eliminate its budget deficit, accounts for 13
percent of the company's revenue.

"The environment in Argentina has deteriorated and there has been
a zero deficit law, and we are uncertain on how this is going to
impact our collections," Jofre said. "I could speculate that
there could be some haircuts on what we are paid, or they pay us
in a way that is extended over time or is not immediately
payable."


IMPSAT: Pescarmona Searching For A Financial Partner
----------------------------------------------------
Argentina's Pescarmona Group is now in the hunt for a partner to
help carry the financial burden of its broadband services
provider Impsat Fiber Networks, Business News Americas reported
Thursday. Pescarmona controls Impsat through Nevasa Holdings,
which owns 46 percent of the company. Impsat ran up debts of some
US$1 billion in the last two years, building out its pan-regional
fiber network. According to the report, interest payments alone
cost the company US$113 million annually. On Wednesday, Impsat
made a US$20-million payment.


IMPSAT: 2Q01 Results In Line, Lower Guidance Going Forward
----------------------------------------------------------
In a company press release, Impsat Fiber Networks, Inc. (Impsat
or the Company) (NASDAQ:IMPT), a leading provider of integrated
broadband data, Internet and voice telecommunications services in
Latin America, announced Thursday its results for the second
quarter of 2001. All figures are in U.S. dollars.

SECOND QUARTER 2001 HIGHLIGHTS

--  Total revenues were $78.5 million, an increase of 21.3% from
the second quarter of 2000 while total revenues for the six month
period increased by 35.4% compared to the first half of 2000;
total revenues in Brazil increased by 79.0% compared to the
second quarter of 2000

--  Net revenues from services grew by 23.6% compared to the
second quarter of 2000 in the midst of an increasingly adverse
macroeconomic environment in Argentina and the devaluation of the
real in Brazil, driven primarily by a 74.4% increase in revenues
from broadband services and a 46.1% increase in revenues from
Internet services

--  Impsat recorded positive EBITDA for the second quarter of
2001 despite increased costs relating to the reduction of the
Company's workforce by nearly 11% and increased provision for
doubtful accounts

--  The Company terminated a series of agreements with affiliates
of 360networks following payment defaults by 360networks. The
termination, initially announced in June, will result in lower
cash inflows for 2001 of $77.4 million

--  Available cash at June 30 totaled $144.5 million, which will
be sufficient to fund the Company's operations through the end of
2001

--  In light of the current macroeconomic conditions in Latin
America, Impsat is lowering its guidance for the remainder of
2001: the Company expects revenues from services to grow by
approximately 25% and EBITDA to range between $10 million and $20
million

--  Given lower-than-expected cash flows primarily resulting from
the termination of contracts with 360networks, the Company is
currently exploring its financial and strategic alternatives,
including, raising additional equity and/or a implementing
financial restructuring of its debt

SECOND QUARTER 2001 RESULTS

Overview

Despite the challenges that the Latin American economies imposed
on the telecommunications sector, Impsat demonstrated the
strength of its market position. Impsat's total net revenues for
the second quarter increased by 21.3% compared to the same
quarter of 2000, for a total of $78.5 million. For the six-month
period ended June 30, 2001, the Company's total revenues were
$167.3 million, an increase of 35.4% compared to the same period
of 2000. Revenues from services (i.e., excluding revenues from
the sale of equipment) totaled $75.1 million for the three months
ended June 30, 2001 and $149.4 million for the six months ended
June 30, 2001, representing increases of 23.6% and 26.0% compared
to the second quarter and first half of 2000, respectively.
Continuing growth in revenues from services and additions to the
Company's corporate customer base were salient factors behind
growth.

Impsat recorded positive operating results, even after booking
one-time increased expenses. In light of the overall downturn in
the market, the Company decided to adjust its expenditure budget
to preserve cash and to revise its provision for doubtful
accounts due from certain customers. Despite the impact of these
measures, Impsat recorded positive EBITDA for the three months
ended June 30, 2001 of $0.1 million, as compared to $2.0 million
for the same quarter of 2000 and to $4.3 million for the first
quarter of 2001. Prior to the effect of one-time severance
charges, EBITDA for the second quarter was $1.5 million. For the
six-month period ended June 30, 2001, EBITDA totaled $4.4
million, compared to $8.4 million for the same period of 2000.

Commenting on the results, Ricardo Verdaguer, the Company's chief
executive officer said, "Our performance in the second quarter
showed our capacity to deal with highly challenging scenarios.
The macroeconomic instability in Argentina reduced the demand for
services and extended collection periods. The Argentine
macroeconomic situation together with the electricity crisis in
Brazil, also adversely affected Brazil's economy and resulted in
devaluation of the real and a decline in growth there.

The Company continued efforts to expand and solidify its
businesses, while devoting greater attention to cost cutting
initiatives and efficiency. The macroeconomic environments in
Argentina and Brazil have caused us to reevaluate our efforts at
small and medium corporate customers. Instead, we expect to focus
our business development as we have in the past on larger
corporate customers until trends in the Latin American region
improve.


IMPSAT: Salomon Cuts Recommendation, Price Target
-------------------------------------------------
After Impsat released its second quarter financial results,
Salomon Smith Barney sharply cut its recommendation on the
company from "speculative buy" to "underperform-speculative,"
according to Dow Jones Friday. Additionally, Salomon informed it
is also cutting its price target on Impsat from $35 to $1.25,
citing concerns about the company's ability to continue as a
going concern.


MULTICANAL: Negotiates With Seven Banks To Avoid Default
-------------------------------------------------------
Multicanal SA may be one of the next Argentine companies likely
to default on debt payments this year amid a severe economic
downturn that the country is experiencing at present, according
to a report Friday in Bloomberg. The No. 2 cable company is
negotiating with seven banks to avoid default on $164 million of
notes due Tuesday.

"Negotiations will likely continue into next week," said Jorge
Rendo, a spokesman for Grupo Clarin, the company's parent. "The
Tuesday deadline could be extended if an accord is reached with
the banks."

According to Christopher Taylor, an analyst at ING Barings,
Multicanal has a 20-percent chance of defaulting on Tuesday's
payment. Seven banks hold the debt securities.

"Two of the seven banks appear to be delaying the talks," Taylor
said. "As the banks extract their pound of flesh, they are making
bondholders rather nervous."

Meanwhile, Multicanal is trying to sell a 4-percent stake in
DirecTV Latin America LLC, a satellite television provider, to
raise funds. The sale is "an important but not a determining
element of the current negotiations," said Standard and Poor's
analyst Marta Castelli, informing that S&P will review the
company's ratings on Tuesday.

Multicanal reportedly has $25 million of commercial paper coming
due next month, $125 million of bonds due in February and $450
million of bonds due in 2007 and beyond.



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

BANESPA: BSCH Chairman May Sell Assets To Buy Banespa
-----------------------------------------------------
Speculation is swirling among investors that Banco Santander
Central Hispano SA Chairman Emilio Botin will sell positions in
companies the Spanish bank owned in order to help pay for its
$4.5 billion purchase of Brazil's Banespa bank, according to a
report Friday in Bloomberg.

Botin, who became sole chairman after the resignation of co-
chairman Jose Maria Amusategui, may consider trimming or selling
BSCH's 11 percent stake in Union Fenosa SA, Spain's No. 3 power
company, and its 20 percent interest in Grupo Dragados SA, the
second-biggest construction services company, the investors said.

"I could foresee BSCH trimming part of its Dragados and Fenosa
stakes," said Cristina Sanchez Gomez, a money manager at Altae
Banco Privado in Madrid, which controls 1.2 billion euros ($1.1
billion). "They paid so much for Banespa."


CIMETAL: Reports 1H01 Losses; Asset Sales Insufficient For Debts
----------------------------------------------------------------
Cimetal, a Belo Horizonte-based metal company, posted 27.2
million reais in losses during the first half of this year,
lesser than the 221.7 million reais in losses posted in the
comparable period the year before, Business News Americas
reported Thursday. The proceeds in the sale of its assets were
not enough to cover salaries and debts. The company is currently
in liquidation and winding up operations.


LIGHT: Losses Worsen; EDF To Take On US$1B Worth Of Projects
------------------------------------------------------------
EDF (Electricite de France) will take on Rio de Janeiro-based
Light's energy power generating investment worth US$1 billion
until 2004, Gazeta Mercantil reported Thursday. According to
Light CEO, Mr Michel Gaillard, the move comes after the Brazilian
utility, which EDF controls, posted R$431.15 million in losses
during the first half of this year, against losses of R$21.6
million in the comparable period of 2000. The losses were mainly
due to the devaluation of the Brazilian Real currency at 7.9
percent during the year. Light ended the first half with a net
worth of R$1.759 billion, posting net income of R$1.709 billion.
The EBITDA stood at R$300.9 million. In June 2001, the company
reported a 15.1-percent drop on the sales of energy due to the
power rationing program launched by the government. The company
slashed its 2001 investments from R$450 million to R$360 million.



=========
C H I L E
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EDELNOR: Electroandina Increases Price Of Tender Offer
------------------------------------------------------
Electroandina International, Inc., a Cayman Islands limited
liability exempted company ("Electroandina International") and a
wholly-owned subsidiary of Electroandina S.A., a Chilean
corporation ("Electroandina"), announced Friday that it is
amending the terms of its cash tender offer (the "Offer") for all
the outstanding (i) 10 1/2% Senior Loan Participation
Certificates due 2005 (the "2005 Certificates"), and (ii) 7 3/4%
Senior Loan Participation Certificates due 2006 (the "2006
Certificates" and, together with the 2005 Certificates, the
"Certificates"). The Certificates represent pro rata
participation interests in all payments of principal and interest
made in respect of loans (the "Loans") of Empresa Electrica del
Norte Grande S.A., a Chilean corporation ("Edelnor"). The 2005
Certificates and the 2006 Certificates were issued in an
aggregate principal amount of US$90,000,000 and US$250,000,000,
respectively.

The consideration for each US$1,000 principal amount of
Certificates tendered pursuant to the Offer has been increased to
US$380.00 (the "Purchase Price"), plus accrued but unpaid
interest to but not including the date of payment for the
Certificates. In addition, the minimum tender condition has been
reduced to 98% of the aggregate principal amount of the
outstanding Certificates. In conjunction with the reduction of
the minimum tender condition, Electroandina International is also
soliciting (the "Consent Solicitation") consents (the "Consents")
to proposed amendments to the agreements (the "Loan Agreements")
pursuant to which the Loans were made. The proposed amendments
would, among other things, eliminate substantially all the
covenants contained in the Loans Agreements, other than the
covenant to pay interest on and the principal of the Loans when
due, and would eliminate all the events of default in respect of
the Loans. Holders may not tender their Certificates pursuant to
the Offer unless a Consent is also validly delivered in respect
of all Certificates tendered thereby. No separate fee or other
amount will be payable in respect of Consents.

Holders who wish to be eligible to receive the Purchase Price
(including holders who had previously tendered Certificates) must
validly tender (and not withdraw) their Certificates and validly
deliver (and not revoke) their Consents to the Depositary on or
prior to the Expiration Date (as defined below). The Offer and
Consent Solicitation will expire at 12:00 midnight, New York City
time, on Wednesday, September 5, 2001, unless extended or earlier
terminated. (such time and date, as the same may be extended, the
"Expiration Date"). The Offer previously had been scheduled to
expire at 9:00 a.m., New York City time, on August 17, 2001.
Tendered Certificates may be withdrawn and Consents may be
revoked on or prior to the Expiration Date but not thereafter
unless the Offer is terminated without any Certificates being
purchased thereunder. The valid withdrawal of Certificates
pursuant to the terms of the Offer will be deemed to constitute a
valid revocation of the related Consents. Holders may not revoke
Consents without withdrawing the previously tendered Certificates
to which such Consents relate. As of the date of this release,
the approximate principal amount of 2005 Certificates and 2006
Certificates tendered was US$400,000 and US$36,000, respectively.

The Offer, as amended, is now conditioned upon, among other
things (1) there being validly tendered and not validly withdrawn
not less than 98% of the aggregate principal amount of the
outstanding Certificates (the "Minimum Tender Condition"), (2)
the acquisition (the "Acquisition") by Electroandina or its
affiliates for a purchase price not exceeding US$1 of all the
shares (the "Shares"), free and clear of all liens, claims,
rights and encumbrances, of capital stock of Edelnor owned,
directly or indirectly, by Mirant Corporation, a Delaware
corporation ("Mirant"), representing not less than 82.3403% of
all the outstanding shares of Edelnor on a fully diluted basis
(the "Acquisition Condition") and (3) (a) there being validly
delivered and not validly revoked Consents in respect of each
Certificate tendered pursuant to the Offer (the "Requisite
Consents"), (b) the Fiscal Agent having validly and irrevocably
instructed the Banks to execute the Loan Amendments implementing
the Proposed Amendments and the Central Bank Letter, (c) the
Fiscal Agent and the Banks having validly and irrevocably
executed and delivered the Fiscal Agency Agreement Amendments and
(d) the Banks and Edelnor having validly and irrevocably executed
and delivered the Loan Amendments and the Central Bank Letter
(collectively, the "Amended Loans Condition").

This announcement does not constitute an offer with respect to
any securities. The offer is subject to the terms and conditions
set forth in an offer to purchase (the "Amended Offer to
Purchase") and the accompanying letter of transmittal which, as
amended from time to time, together will constitute the "Amended
Offer Documents." Capitalized terms used herein but not defined
shall have the meanings set forth in the Amended Offer to
Purchase. Electroandina International will furnish the Amended
Offer Documents to holders of the Certificates. All holders of
Certificates should read the Amended Offer Documents carefully
before making any decision regarding tendering their
Certificates.

J.P. Morgan Securities Inc. is the dealer manager for the Offer
and solicitation agent for the Consent Solicitation.


GENER: TotalFinaElf Proposes Tender, Solicitates HpdA Notes
-----------------------------------------------------------
TotalFinaElf announced Friday that one of its wholly owned
subsidiaries has commenced a partial tender offer and a consent
solicitation for holders of Series I and Series II Trust Notes of
Hidroelectrica Piedra del Aguila S.A (HpdA), a 1400 MW
hydroelectric power plant in the Neuquen province of Argentina.

TotalFinaElf is offering to purchase, at par, 10% of the Notes
tendered by holders consenting to proposed amendments to the
terms of the Notes subject to certain conditions, including the
effective purchase of GENER's 41.3% indirect interest in HpdA.
The consent solicitation and the partial tender offer will expire
on September 14, 2001.

This operation is a step in furtherance of the purchase by
TotalFinaElf of an indirect holding in HpdA, in accordance with
the agreements signed on November 28, 2000 with AES Corporation
and on March 2, 2001 with GENER to buy GENER's electricity
generation and transmission assets in Argentina.


MINERA CASCADA: Cruzat Finalizes Sale To Chilean Entrepreneurs
--------------------------------------------------------------
Cruzat group has finally sold its assets in Minera Cascada to
Chilean entrepreneurs Sergio Cardone and Anselmo Palma after
taking nearly a year to complete the process, Business News
Americas revealed Thursday. The value of the operation wasn't
disclosed. The sale, which was accomplished through a public
auction, is part of Cruzat's plan to focus on real estate.

Cascada stopped operating in July last year, with bank debts of
some US$35 million. In went into bankruptcy protection in
October.  



===============
C O L O M B I A
===============

BANCAFE: Still No Base Price Set From Council of Ministers
----------------------------------------------------------
Hector Cadena, director of the state deposit guarantee agency,
reasoned that Colombia's plans to sell Bancafe, the biggest state
bank, have been delayed partly because it is still waiting for
the council of ministers to meet to set a base price for the
bank, Bloomberg reported Friday. Cadena, whose agency took over
the bank in 1999 to prepare it for sale by October this year,
said that the meeting should have taken place in July. Under a
1999 loan accord with the International Monetary Fund, Colombia
was to sell Bancafe by the end of this year.

"This surprised us," said Andres Restrepo, head of research at
Corfivalle SA, an investment bank that is co-managing the sale
together with BNP Paribas. "We have always seen that the Finance
Minister (Juan Manuel Santos) and others making these decisions
have said it would go ahead this year."

Cadena said, however, that he was trying to contact Santos to
determine the status of the sale process.

Meanwhile, Caracol Radio, without citing its sources, reported
that the sale of Bancafe had been delayed until next year due to
lack of interest from potential buyers.



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

AHMSA: GAN Restructuring Suffers Setback Due To Lawsuit
-------------------------------------------------------
Debt-restructuring at Grupo Acero del Norte (GAN), the holding
company controlling Altos Hornos de Mexico SA (AHMSA), has been
delayed due to problems created by the ongoing legal attack
lodged against its two executives, Xavier Autrey and Jorge
Ancira, by Banco del Bajio, Mexico City daily Reforma reported
Friday. According to Anthony McCarthy, chairman of the committee
of AHMSA bank creditors, the delay has cost banks $17 million
every month because AHMSA and Acero are not paying interest on
their loans of $2.3 billion. McCarthy, who has been hoping to
conclude the restructuring by December, said the process would
now probably take until January or February next year.


BANCRECER: Winning Bid To Be Announced September 24
---------------------------------------------------
Carlos Septien Michel, the head of failed bank Bancrecer,
announced that the declaration of a winning bid in Mexican bank
bailout agency IPAB's auction of Bancrecer will be delayed until
Sept. 24, Mexican financial daily El Economista revealed Friday.
The process has been extended at the request of Canada's
Scotiabank and Mexico's Banorte, the only two participating
bidders, who have already paid IPAB $15 million to demonstrate
their serious intentions in the process. Both parties' access to
the "data room," which contains all of Bancrecer's records, will
be extended from Aug. 17 to Aug. 31. Subsequent to the closing of
the data room, the bidders will have a week to put together their
final proposals. Presentation of proposals will be extended from
Aug. 20 to Sept. 10.


GISSA: Plant Closure Not An Indication Of Financial Struggle
------------------------------------------------------------
Officials of Grupo Industrial Saltillo stated that the permanent
closure of its Cifunsa 1 plant is not an indication that it is in
financial turmoil, although it may hint that the auto-parts
market is expected to decline further, Mexican financial daily El
Economista reported Friday. The company attributed the closure to
lower demand, citing the economic slump in the United States.
GISSA expects that the recent move would allow it to further
lower operational costs and improve profit margins. The company
achieved operating profits of 381 million pesos in the first half
of the year.


VITRO: Boasts 2-Year Contract With Coca-Cola
--------------------------------------------
Mexican glass company Grupo Vitro, which recently obtained
syndicated credit to the tune of US$235 million, signed a 2-year
contract with Coca-Cola's leading bottling operation, CocaCocal
Enterprises (CCE), Mexican financial daily El Economista said
Thursday. The contract will be for the supply of bottles to
northern American and probably, Europe. Vitro, which hopes to
post a 2001 turnover of over US$3 billion compared to the
previous year's US$2.857 billion, continues to compete with Saint
Gobain USA, Consumers Glass and Anchor Glass Containers.



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

PETROPAR: CYCE's Audit Uncovers G$14B Of Bad Debts
--------------------------------------------------
CYCE's audit of Petropar's finances showed that the Paraguayan
oil company has bad debts of more than G$14 billion, Diario ABC
reported Aug. 14, 2001. In addition to the troubled loans, the
auditing firm revealed that there's a difference of nearly G$15
million between the balance sheet reported on July 31, 2000 and
the one posted for the same period of this year. CYCE predicts
that of the overall bad debts, some G$7 billion will never be
recovered by the company.



=======
P E R U
=======

AEROCONTINENTE: Charged Officials Free Again
--------------------------------------------
A three-judge panel of the Santiago Appeals court ruled
unanimously to drop money-laundering charges against four
officials of the Chilean division of AeroContinente SA, Peru's
No. 1 airline, Bloomberg reported Friday. The judges, citing
insufficient proof presented by prosecutors to support the
charges, ruled unanimously to exonerate the executives, who were
imprisoned after being charged last month.

The recent court action should take the airline a step closer to
resuming flights. However, courts still must rule on an appeal by
AeroContinente that would officially allow it to fly again.




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 and Edem
Psamathe P. Alfeche, Editors.

Copyright 2001.  All rights reserved.  ISSN 1529-2746.

This material is copyrighted and any commercial use, resale or
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