/raid1/www/Hosts/bankrupt/TCRLA_Public/010918.mbx        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, September 18, 2001, Vol. 2, Issue 182

                           Headlines



A R G E N T I N A

ACINDAR: S&P Maintains B- Ratings On CreditWatch Negative
AEROLINEAS ARGENTINAS: Spanish Government Confirms Four Offers
AEROLINEAS ARGENTINAS: AeroContinente Submits $5M Offer
AEROLINEAS ARGENTINAS: Joins Improvement Effort For Its Sector


B R A Z I L

CVRD: Concludes the Sale of CENIBRA
MOULINEX-BRANDT: Brazilian Ops To Continue Despite Receivership
MOULINEX-BRANDT: Chairman Wants Global Acquisition
VESPER: To Launch New Strategy Focusing On Corporate Market


C H I L E

LANCHILE: Dismisses 73 Pilots, Begins Legal Actions


E C U A D O R

FILANBANCO: Reveals New Auction Plan


G U A T E M A L A

METROPOLITANO/PROMOTOR: To Be Liquidated Thru Courts


M E X I C O

AEROMEXICO: Resuming Flights To U.S. Gradually
CINTRA: Privatization To Come In Three Weeks
GRUPO DINA: Plant Closure Indicates Bankruptcy Close At Hand
MEXICANA: Reaches Agreement With Flight Attendants
MEXICANA: Posts US$7.5M Loses On Suspensded Operations


     - - - - - - - - - - -


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

ACINDAR: S&P Maintains B- Ratings On CreditWatch Negative
---------------------------------------------------------
Standard & Poor's Corp maintained Acindar Industria Argentina de
Aceros SA's B- long-term corporate credit and senior unsecured
debt ratings on CreditWatch with negative implications following
the publication of full-year earnings results, AFX-Asia reported
Thursday.

S&P said that the company's financial performance has continued
to deteriorate over fiscal 2001 citing continuing recession in
Argentina, as well as the company's heavy reliance on the highly
cyclical domestic construction industry.

The steelmaker recently reported a loss of $113.9 million in the
July 2000 to June 2001 fiscal year. A "relatively competitive
cost position" enabled the company to increase total exports by
15.4 percent --mostly within Latin America-- to 29.6 percent
of total sales," the ratings agency said.

However, lower margins on exports meant that the growth in volume
was not sufficient to compensate for the significant weakening of
the domestic market, which experienced a 10.2 percent decline in
prices in the year to June.

Cost-cutting measures helped maintain relatively stable EBITDA
margins, the ratings agency added. But financial costs increased
resulting in a fall in EBITDA interest coverage to total debt to
0.9 times.

"High debt obligations and limited financial flexibility remain
a significant risk due to the limitations of Argentina's capital
markets and the company's relatively high short-term trade
finance exposure," S&P said.

"Given the considerable deterioration in Acindar's cash flow
generation relative to its high indebtedness, short-term debt
needs to be restructured quickly to maintain ratings stability,"
the ratings agency said.

Acindar produces non-flat steel mainly for the construction and
automotive sectors, two of the hardest hit industries during
Argentina's three years of economic slump.


AEROLINEAS ARGENTINAS: Spanish Government Confirms Four Offers
--------------------------------------------------------------
The Spanish government has received a total of four offers for
Aerol¡neas Argentinas, according to a report Friday in the
Financial Times. The offers are from Grupo Marsans, one of
Spain's leading tour operators; Juan Carlos Pellegrini, a former
chairman of Aerol¡neas Argentinas; Grupo Pescarmona, an Argentine
industrial group based in the province of Mendoza; and a US
investment fund the identity of which was not revealed by SEPI,
the Spanish state holding company in charge of the sale. SEPI
said the government might decide on the winning bidder before the
end of September.

The airline's $900 million in debt might be the biggest stumbling
block to making a deal. In addition, Aerolineas Argentinas is
losing more than $30 million a month. The company filed for
protection from creditors in June after Repsol-YPF, the Spanish
oil company, threatened to ground the carrier's flights because
of unpaid fuel bills. SEPI put the airline up for sale after
Argentine trade unions refused to back a restructuring plan that
involved job cuts. SEPI says Iberia invested more than $1.8
billion in Aerol¡neas Argentinas during the 1990s in an attempt
to make its sister airline profitable. The Argentine carrier was
off-loaded on SEPI when Iberia was privatized earlier this year.
SEPI cut off any further financial aid in June, arguing it would
not throw good money after bad.

On the other hand, industry executives suggest that the Spanish
government will have to absorb at least half of Aerol¡neas
Argentinas' debt in order to get rid of a company that has become
a political headache as well as a financial burden.


AEROLINEAS ARGENTINAS: AeroContinente Submits $5M Offer
-------------------------------------------------------
Peru's AeroContinente airlines submitted a $5-million bid
Wednesday to purchase Aerolineas Argentinas and Austral to
Spain's state-owned holding company SEPI, EFE reported Friday.
The Peruvian company's move will make it a leading contender in
the bidding war for SEPI's ailing Argentine unit, which it
intends to overhaul without laying off any workers.

"Even though the details of the proposal cannot be revealed
because of a commitment to confidentiality, this is a very
attractive offer because it bases economic and commercial
prosperity on the success of Aerocontinente, a leader in
commercial aviation in Latin America," according to statement
released by Aerocontinente.


AEROLINEAS ARGENTINAS: Joins Improvement Effort For Its Sector
--------------------------------------------------------------
Aerolineas Argentinas and its controlled company Austral, Lapa
(future ARG), Dinar and Southern Winds, are making a joint effort
to increase tourism and improve the image of the local airlines,
El Cronista reported Thursday. These companies, under the
umbrella of the Secretariat of Tourism, launched Fly Pass, a
ticket for internal flights, which offers connections to 55
destinations with more than 1,400 flights weekly. These tickets
can be used in all the airlines part of this local alliance. The
companies hope the strategy will increase the 3.3 million
tourists who arrive in the country to 4.5 million by 2004.



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

CVRD: Concludes the Sale of CENIBRA
-----------------------------------
In a company press release, Companhia Vale do Rio Doce (CVRD)
announced that the sale of all shares of the total capital of
Celulose Nipo-Brasileira S/A (CENIBRA) held by its subsidiary,
Itabira Rio Doce Company Limited (ITACO), to Japan Brazil Paper
and Pulp Resources Development Co., Ltd (JBP) was concluded
September 14, 2001. This transaction was represented by
86,562,480 common shares, 5,694,900 class A preferred shares and
3,211,189 class D preferred shares, amounting to 51.48% of the
total capital of CENIBRA.

Due to the financial settlement of this transaction, comprising
payment in cash amounting to US$670,500,000, and tranferance of
shares, JBP now owns 100% of the total capital of CENIBRA.

The financial results obtained by ITACO via this transaction will
be reflected in equity income in CVRD's 3Q01 financial
statements, in Brazilian Reais.

The sale of CVRD stake in CENIBRA, as well as other divestitures
made since late 2000, confirm the Company's strategic focus on
mining and logistics.

CONTACT: Roberto Castello Branco,
         +55-21-3814-4540, or
         castello@cvrd.com.br,
         or
         Andreia Reis,
         +55-21-3814-4643, or
         andreis@cvrd.com.br,
         or
         Barbara Geluda,
         +55-21-3814-4557, or
         geluda@cvrd.com.br,
         or
         Daniela Tinoco,
         +55-21-3814-4946, or
         daniela@cvrd.com.br,


MOULINEX-BRANDT: Brazilian Ops To Continue Despite Receivership
---------------------------------------------------------------
Moulinex do Brasil intends to continue with its normal operations
in the country despite its French parent's bankruptcy filing,
AFX-European Focus said in a report Friday. According to the
Brazilian branch's chairman, Alvaro Luis Veloso, the general
situation of the local unit is very different from its French
parent, Moulinex-Brandt.

Meanwhile, Veloso also revealed that five companies have
expressed an interest in taking over Moulinex-Brandt. Chief among
them is including France's Seb. Seb, the parent of local company
Arno, is particularly interested in Moulinex's operations in
Brazil, China, Egypt, Mexico and Spain. Reports have it that
negotiations with Seb are at an advanced stage and are expected
to close by the end of the month.


MOULINEX-BRANDT: Chairman Wants Global Acquisition
--------------------------------------------------
Didier Segard and Francisque Gay, the two court-appointed
administrators nominated to oversee domestic appliance
manufacturer Moulinex-Brandt after the group's decision to file
for bankruptcy, have stated that they know of some "half-dozen
potential buyers," but didn't mention any names, Le Monde said in
a report Thursday.

Meanwhile, group chairman Patrick Puy recently commented that he
would "favor a global acquisition of Moulinex Brandt." But
certain members of the group's central works committee expressed
skepticism regarding the declarations.

According to CGT union representative Thierry Le Paon, it is "far
too early for talk of buyers. In view of the state the group is
in and its debts, I doubt that there are many groups capable of
buying us."


VESPER: To Launch New Strategy Focusing On Corporate Market
-----------------------------------------------------------
Brazilian phone company Vesper launched a strategy to conquer new
customers and boost revenues, Gazeta Mercantil reported Friday.
The company decided to direct its focus in the corporate client
through the provision of a bundle of combined services. The
company's strategy is designed to take advantage of the network
that will cover 165 cities in 17 states until late this year, and
penetrate in market niches not targeted by Embratel, Telemar and
Telefonica. Vesper will provide toll free services, long distance
calls and voice transmission.



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

LANCHILE: Dismisses 73 Pilots, Begins Legal Actions
---------------------------------------------------
Lan Chile S.A., ("Lan Chile" or "the Company") (NYSE: LFL) on
Friday dismissed 73 of the approximately 400 pilots form the
LanChile Pilot Union.

The entire LanChile Pilot Union represents approximately 60% of
the Company's total pilots.

During the last few weeks, LanChile has been negatively impacted
by a pilot-induced slowdown. The pilots in the LanChile Pilot
Union have significantly increased delays in both departure and
arrival times and have further disrupted operations by increasing
the amount of medical leaves requested.

As a result, the Company has decided to take several legal
actions against some of the pilots in the union, including the
dismissal of 73 pilots who seriously breached their existing work
contracts.

The Company respects the Pilots union's legal rights under
Chilean labor laws; however, these pilots' recent actions, which
are not in compliance with their existing labor contracts, cannot
be tolerated.

The Company and Pilot Union have an existing contract that is
scheduled to expire on November 30, 2001. Negotiations between
the Company and the pilot Union have been scheduled to begin on
October 15th. If the Company and the Union have not reached an
agreement by November 30th; only then, under Chilean law, is the
Pilot Union permitted to initiate a strike.

LanChile remains committed to providing its passengers with a
safe, world-class service and apologizes to any passengers who
have been inconvenienced by the union's actions. The Company will
continue to keep the market and its passengers informed of any
further developments.

LanChile would like to express its deep regrets and sorrow for
the tragedy that has struck our U.S. friends and colleagues. We
share in your sorrow and our prayers remain with all of you and
your loved ones.

CONTACT:          LanChile
                  Alejandro de la Fuente
                  Daniel Jones
                  djones@lanchile.cl
                  Andres Bianchi
                  abianchi@lanchile.cl
                  562/565-2538 / 6812



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

FILANBANCO: Reveals New Auction Plan
------------------------------------
Ecuador's biggest bank Filanbanco, which has been in state hands
since 1998, and has halted operations in July due to liquidity
problems and difficulty in recovering its loans, announced Friday
that it has a new plan to auction off its assets and liabilities,
reported Reuters.

The new plan is to hold five smaller auctions in which Filanbanco
will aim to sell assets with a net value of $230 million and
state bonds with a value of $210 million, according to
Filanbanco's general manager Jorge Moran. The plan, which will
take effect starting September 25, has been presented to the
Banking Superintendency and has been authorized, related Moran.

Individuals and companies other than banks will be able to
participate in these auctions. The government's goal is to
complete them by October 5, Moran said. Filanbanco's loans will
not be auctioned, he said. About 64 percent of the bank's loans
were considered non-performing when it closed in July, according
to figures from the Banking Superintendency.

The auction's main goal is to cover Filanbanco's short-term
deposits over $10,000 and long-term deposits, which have not yet
been returned to their owners and total about $400 million,
according to Moran.



=================
G U A T E M A L A
=================

METROPOLITANO/PROMOTOR: To Be Liquidated Thru Courts
----------------------------------------------------
Guatemala's deputy banking regulator Ergas Barquin disclosed that
banks Metropolitano and Promotor, which were intervened earlier
this year due to capital and liquidity problems, would be
liquidated through the courts, Business News Americas revealed
Friday. Guatemala's Monetary Council has given a nod to the
regulator's office to request a judicial liquidation process,
Barquin said, adding that the regulator will approach local
courts this week or next to start the process.

The banks' assets, which total less than US$120 million, will be
sold to reimburse creditors. However, should creditors decide not
to accept the solution, the courts will initiate legal
proceedings against the directors of the banks, he said.

The two banks belong to Guatemalan businessman Franscisco
Alvardo.



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

AEROMEXICO: Resuming Flights To U.S. Gradually
----------------------------------------------
Mexico's leading airline Aeromexico on Saturday resumed flights
to the United States, suspended since Tuesday's terrorist attacks
on the World Trade Center in New York and the Pentagon in
Washington, Reuters said in a report. The carrier stated flights
to the United States would resume gradually, "according to a
special itinerary."

Aeromexico said it had reinforced security for all domestic and
international flights. Passengers should check the status and
schedule of their flights six hours before they were due to fly,
and arrive at the airport three hours ahead of time for
international flights.


CINTRA: Privatization To Come In Three Weeks
--------------------------------------------
Mexico's banking institute IPAB is likely to begin in three
weeks' time the privatization of the holding company Cintra once
the new national aviation policy has been made public in the
Diario Oficial de la Federacion, Mexican financial daily El
Economista reported Friday. The new aviation policy will
establish a minimum and a maximum tariff for flights and create
an official body for sector regulation amongst other changes it
will bring in. The restriction on foreign ownership of airlines
beyond a 25-percent stake remains intact as does the reluctance
to announce 'open skies'.


GRUPO DINA: Plant Closure Indicates Bankruptcy Close At Hand
------------------------------------------------------------
The recent closure of Grupo Consorcio Dina's plant in the city of
Sahagun, in the state of Hidalgo, indicates that the Mexican bus
and truck maker is now heading for bankruptcy, Mexican financial
daily El Economista reported Friday. According to company
executives, the truck plant represented close to 70 percent of
the company's revenues. Dina's debts, as of June 2001, stood at
2.381 billion pesos, compared to assets of 2.372 billion pesos,
while quarterly sales are barely worth 130 million pesos. The
company has been in talks with Labor Minister Carlos Abascal to
determine the fate of the company's 506 unionized employees.



MEXICANA: Reaches Agreement With Flight Attendants
--------------------------------------------------
Mexicana Airlines announced Sunday that together with the flight
attendants' association, Asociacion Sindical de Sobrecargos de
Aviacion (ASSA), both parties have mutually reached an agreement
regarding wages, thus averting any possibility of a strike.

Mexicana Airlines acknowledges the sensible and responsible
manner in which the flight attendants have responded by accepting
Mexicana's offer of increasing their wages by 8.5 percent.

As United States air space has begun to re-open, Mexicana resumed
its flight operations September 16, 2001.

CONTACT:  Jenny Jenks, Marketing Director, International
          Division of Mexicana Airlines, +1-210-491-9764, or
          ennyjenks@mexicana.com


MEXICANA: Posts US$7.5M Loses On Suspensded Operations
------------------------------------------------------
Due to the three-day suspension of flights to and from the United
States, Mexicana de Aviacion lost $7.5 million, according to a
report Friday in Mexico City daily El Universal. The airline is
losing $2.5 million per day as a result of the suspension of 80
flights per day to and from the United States and Canada,
operations that represent about a third of the company's
business. Had the flights continued to be suspended for eight
more days, the company would have gone into immediate bankruptcy,
said a company spokesperson.

Mexicana is controlled by holding company Cintra.




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
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
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Information contained herein is obtained from sources believed to
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The TCR Latin America subscription rate is $575 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
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or balance thereof are $25 each.  For subscription information,
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