/raid1/www/Hosts/bankrupt/TCRLA_Public/011126.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

            Monday, November 26, 2001, Vol. 2, Issue 230

                           Headlines


A R G E N T I N A

NATIONAL GRID: To Sell LA Businesses Due To Regional Economics
SOCIEDAD COMERCIAL: Proposing New Debt Options For Creditors


B R A Z I L

CEMIG: Minas Gerais To Pass Debt On To Federal Government
CVRD: Issues Statement Regarding Government Debt, Securities
TRANSBRASIL: Losing Market Share Following September US Attacks
USIMINAS: Continues To Struggle With Cosipa's Restructuring
VESPER: Bell Canada Intl. Reduces Stake, Writing Off Investment
VESPER: VeloCom Drops Other Interests To Concentrate On Vesper


C H I L E

AEROCONTINENTE: Chile Takes Steps To Avoic Bankruptcy


C O L O M B I A

CAJA AGRARIA: Starts Repaying Debts From Liquidation Proceeds


M E X I C O

AEROMEXICO/MEXICANA: $108M Aid Bill Awaits Lower House Approval
BUFETE INDUSTRIAL: May Lose In Bid For Modernization Project
CLUB MED: Announces Plan To Axe More Jobs
GRUPO MEXICO: Analyst Downgrades SPCC On Global Copper Worries
XEROX: Fitch Rates Conv. Trust Pref. `B+', Liquidity Improved


     - - - - - - - - - - -


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

NATIONAL GRID: To Sell LA Businesses Due To Regional Economics
--------------------------------------------------------------
After suspending its investments in Silica Networks, British
power utility National Grid disclosed that it has put its
Argentine telecoms business on the block, The Times reported.

National Grid decided to find a buyer for its Argentine business
due to the continuing economic deterioration in the region.

The British power company has invested US$61 million and owns a
direct 50 percent stake in Silica Networks, a joint venture with
US-based Williams Communications (19.9 percent) and Chilean telco
Manquehue Net (30.1 percent).

At the same time, National Grid announced that is also selling
its interest in the Brazilian long-distance telecom operator
Intelig, in which it has invested some US$530 million.

According to the British firm, Intelig has met overall revenue
and EBITDA targets with an operating loss for the fiscal first
half ending September 30, 2001 at US$22 million, down from US$70
million for the same period 2000.

However, despite "satisfying the preconditions to completing
permanent vendor financing," the company stated, "vendors have
not provided the permanent financing facility."

As a result, Intelig's shareholders - National Grid (50 percent),
US-based mobile operator Sprint PCS (25 percent) and France
Telecom (25 percent) - have "appointed advisers to seek new
strategic investors."

Meanwhile, the operator will continue to be funded by interim
vendor financing.

National Grid said it has set aside GBP290m (US$410.7 million)
for writing down costs related to its ailing Latin American
investments.


SOCIEDAD COMERCIAL: Proposing New Debt Options For Creditors
------------------------------------------------------------
Sociedad Comercial del Plata SA, an oil and entertainment
conglomerate, informed it is offering to pay creditors verified
under its court arrangement 85 percent of the value of their
debts with a 25-year bond. The bond would carry an 18-year
interest-free grace period, AFX-Europe reported.

According to the company, a similar arrangement is also being
offered to the creditors of its oil unit Cia. General de
Combustibles SA and suburban railway and funfair Tren de la Costa
SA.

Creditors of Comercial del Plata may opt to recover 70 percent of
their debt in the form of a new 15-year bond, with 11 years
grace, at which time capital amortization would increase from 10
percent of the issue to 30 percent.

The proposed Plata bond would pay 1 percent annual interest
payable twice a year from six to eight years after the proposal
is approved by courts, 2 percent in years 9 and 10, and Libor
thereafter.

The bonds will be convertible at the creditor's option for up to
20 percent of Comercial del Plata's equity in its unit Cia.
General de Combustibles between years 5 and 10.

Comercial del Plata may back all or part of the bonds at 50
percent of par value, a percentage that will increase 7 percent
per year from court approval of protection. If the bonds are
bought back, the company will be free to sell up to 80 percent of
its stake in Cia. General de Combustibles.

The 30 percent cut on the alternative bond will first be
applicable to interest payments accrued up to the date Comercial
del Plata filed for protection, with the remainder applied to
principal. Creditors who filed after the due date and those whose
filings are under review will not be eligible for the second
bond, it added.

Cia. General de Combustibles' creditors will also be offered two
bonds on similar terms to its parent's issues.

One bond issue will be convertible for Cia. General de
Combustibles shares, for a total of 30 percent of its shares if
converted in the sixth year, falling to 26 percent if converted
in the tenth year.

Tren de la Costa will be renamed Parque de la Costa SA, spining
off its railway assets, along with the track and shops at
stations to a new company: Nuevo Tren de la Costa SA.

Nuevo Tren de la Costa SA will have capital of up to 45 million
pesos, plus the amounts of secured debt owed to Banco de la
Provincia de Buenos Aires, and the municipalities of Vicente
Lopez, San Isidro, San Fernando and Tigre, that the line runs
through.

Parque de la Costa will transfer its equity in casino joint
venture Trillenium SA to a trust fund, including Tren de la
Costa's current stock options, to be sold at a base price of
US$65 million within 360 days of court approval.

Tren de la Costa's creditors are offered the 25-year interest-
free bond for 85 percent of the par value of debt.

They are also offered 75 percent of debt for up to US$65 million
as participation in the Trillenium trust, or a pro rata amount if
the latter choice is oversubsribed.

Creditors may also choose to accept 75 percent of their approved
claims for up to US$45 million at par for Nuevo Tren de la Costa
class C shares, which will be held in a 10-year trust fund, when
they will be exchanged for class B shares.



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

CEMIG: Minas Gerais To Pass Debt On To Federal Government
---------------------------------------------------------
The Minas Gerais state government owes a total debt of R$1.24
billion to Cemig (Companhia Energetica de Minas Gerais), Valor
Economico reported. The state now intends to pass on to the
federal government R$350 million of its total obligations to the
company.

Such an operation is permissible under a law that allows for the
Treasury to purchase credits that state utilities have with  
state governments.

The move would in turn allow Cemig to pay a debt it owes to Aneel
(Agencia Nacional de Energia Eletrica).


CVRD: Issues Statement Regarding Government Debt, Securities
----------------------------------------------------------
In an official statement, Companhia Vale do Rio Doce (NYSE:
RIOpr) (CVRD), expressed its awareness that Brazilian government
debt and securities are being offered to the market as its
properties by intermediaries claiming to be duly authorized by
the Company. CVRD clarified the following points:

    *  the Company did not authorize any intermediary to      
       represent it with the purpose of negotiating such debt and
       securities;

    *  all negotiations involving CVRD financial assets are
       exclusively made by its Finance Division, located at:

Avenida Graca Aranha 26, 17th floor, Rio de Janeiro, Brazil.

The purpose of this press release is to prevent and restrain the
public from realizing transactions with nonexistent assets.

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

          Daniela Tinoco: daniela@cvrd.com.br
          +55-21-3814-4946



TELETRUST: To Pay Off Part Of Debts With Equity
-----------------------------------------------
Salvatore Cacciola announced that Teletrust de Recebiveis is
going to pay off part of its R$160 debt owed to five Brazilian
funds  - Previa, Valia, Petros, Funcef and Sistel, by offering
them shares in telecom companies, O Globo reported Wednesday.

Cacciola, a former banker and owner of Banco Marka, Teletrust's
parent company, revealed that the shares are still worth
approximately R$90 million, even after the sharp drops on the
stock market.

According to Teletrust's lawyer Alfredo Bumachar, the shares were
not previously offered because the company did not agree with the
pension funds' claim that they were owed $160 million. Teletrust
owes the pension funds R$160 million for a debenture purchased in
1994 that was guaranteed by telephone lines.

The five Brazilian pension funds are seeking to force a
bankruptcy proceeding on Teletrust.


TRANSBRASIL: Losing Market Share Following September US Attacks
---------------------------------------------------------------
Figures from Brazil's civil aviation department (DAC) showed that
the Brazilian airline Transbrasil's share in the country's civil
aviation market has gone down to just 5.93 percent in October, a
19.2 percent drop from September's 7.34 percent share, O Globo
said in a report.

Transbrasil is believed to be the most problematic of Brazil's
airlines, which has been in a crisis situation since the
devaluation of the real in 1999. The company's problems were
exacerbated by the shrinking of the entire travel market
following the 11 September terrorist attacks in the US.


USIMINAS: Continues To Struggle With Cosipa's Restructuring
-----------------------------------------------------------
Usiminas is still burdened with the problems of the restructuring
of Cosipa, announced in 1998, Valor Economico reported.

Usiminas, Cosipa's majority shareholder, is struggling to deal
with actions in the courts and in the CVM (Comissao de Valores
Mobilarios) lodged by minority shareholders protesting the action
and alleging irregularities.

The minority shareholders are reportedly facing a dilution in the
value of their shares of up to 900 percent.

A court injunction in the third week of November stopped a
debenture conversion process that would have increased Usiminas'
share Cosipa from 32 percent to 93 percent. The minority
shareholders are pressing for a public offer to buy their shares,
which they say is required by law under the cirucumstances.


VESPER: Bell Canada Intl. Reduces Stake, Writing Off Investment
---------------------------------------------------------------
In a company press release, Bell Canada International Inc.
(NASDAQ: BCICF) (TSE: BI.) ("BCI") clarified November 19 that it
will hold a 1.4% interest on a fully-diluted basis in the
Brazilian competitive local exchange providers, Vesper S.A. and
Vesper Sao Paulo S.A. ("the Vespers"), assuming that all equity
commitments under the recently announced restructuring plan are
met.

BCI commenced treating the Vespers as part of Discontinued
Operations in the first quarter of this fiscal year and wrote off
its investment in the third quarter.

CONTACT:  Bell Canada International Inc.
          Peter Burn
          Tel: 514/392-2357
          peter.burn@bci.ca
          or
          Bell Canada International Inc.
          Brian Quick
          Tel: 514/392-2369
          brian.quick@bci.ca


VESPER: VeloCom Drops Other Interests To Concentrate On Vesper
--------------------------------------------------------------
VeloCom Inc. is pulling out from its Argentinean and Uruguayan
operations for lack of available investment capital for
telecommunications companies. The company intends to focus its
activities on Vesper, Valor Economico reported.

Vesper, Latin America's largest competitive local exchange
carrier, is a joint venture between VeloCom and QUALCOMM
Incorporated.

VeloCom announced a few days ago that it has successfully
completed its financial restructuring of Vesper, subsequently
reducing its share in the company from 53.8 percent to 23.5
percent.

The restructuring, which was designed to infuse capital
sufficient to meet Vesper's future funding needs and
significantly deleverage the company, eliminates over US$1
billion in debt and includes an additional cash commitment of
$346 million from the shareholders. QUALCOMM and VeloCom are
contributing $266 million and $80 million in new equity
respectively.

Vesper has built a new management team under the leadership of
Luiz Kaufmann, former president of Aracruz, one of the world's
leading pulp & paper companies. The company has also
substantially reduced operating expenses, including a headcount
reduction of approximately 50 percent.

"Together with QUALCOMM, we have achieved the goals of
strengthening Vesper's balance sheet and securing its future
funding needs," said David Leonard, president and CEO of VeloCom.

"Committing to this funding in the current capital market
environment underscores our belief in the continued development
of Brazil's telecommunications market and Vesper's ability to
capitalize on this opportunity. We are confident that, under Luiz
Kaufmann's leadership, Vesper will become a strong and profitable
competitor, and will be well positioned to take advantage of
Brazil's attractive growth opportunities," added Leonard.

Vesper is currently battling Telemar and Telefonica for phone
service market share in 17 states. The company expects to end the
year with 500,000 customers.

Both Qualcomm and VeloCom are looking for a strategic partner for
Vesper, after which Qualcomm may give up its control. Rumors
continue that VeloCom may also want to sell its share in Vesper.


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

AEROCONTINENTE: Chile Takes Steps To Avoic Bankruptcy
-----------------------------------------------------
The Chilean subsidiary of Peru's AeroContinente filed a petition
November 16 with a Santiago civil court asking creditors for a
judicial agreement in order to avert bankruptcy, officials
revealed in an EFE report.

AeroContinente's proposed agreement asks for an extension to
repay its debts, which total $17 million. The company offers
machinery, fixed assets and rights to air routes as collateral in
the agreement.

AeroContinente also proposed making payments and paying salaries
and pending social security payments from the cash flow it
generates.

In addition, the company asked for a 24-month extension for the
loans that are already past due. Creditors will have one month to
accept or reject the terms of the proposed agreement.

The court has already assigned an expert to evaluate the
company's commercial viability. AeroContinente could be declared
bankrupt within 40 days if the expert assigned determines that
the company is not commercially viable.



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

CAJA AGRARIA: Starts Repaying Debts From Liquidation Proceeds
-------------------------------------------------------------
Colombia's Caja Agraria was supposed to start paying last Monday
creditors who are owed a total of 37 billion pesos from the
company's liquidation, South American Business Information said
in a report.

The first wave of payments is to go to creditors owed goods and
cash who will receive the amounts due to them between now and
November 30, 2001.

In the second wave, those owed for liabilities such as mortgages,
employment debts, taxes etc. will receive their amounts due
between December 3 and 14, 2001.

Payment will be carried out at Banco Ganadero offices in Armenia,
Barranquilla, Bogota, Bucaramanga, Cali, Cartagena, Cucuta,
Florencia, Ibague, Manizales, Medellin, Mocoa, Monteria, Neiva,
Pasto, Pereira, Popayan, Quibdo, Riohacha, San Jose de Guaviare,
Santa Marta, Sincelejo, Tunja, Valledupar, Villavicencio and
Yopal.



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

AEROMEXICO/MEXICANA: $108M Aid Bill Awaits Lower House Approval
---------------------------------------------------------------
Mexico's legislative committee in the Chamber of Deputies
approved Wednesday a one-billion-peso ($108 million) aid package
for the country's struggling airlines, which have been reeling
since the September 11 terrorist attacks, EFE reported.

The executive-proposed package now awaits the approval of the
lower house of Congress. The said committee is set to consider
the bill next week. If approved, it will be sent to the Senate
for final consideration.

"I don't expect any problem in approving the bill given the
agreement among various legislative factions," said Deputy Jesus
Orozco of the opposition Institutional Revolutionary Party (PRI).

The funds would help Mexican airlines, mainly Aeromexico and
Mexicana, meet additional insurance premium costs for war and
terrorism risks. The money would also offset millions of dollars
in losses.

According to Orozco, the aid would be provided in the form of
six-month, renewable development bank loans.


BUFETE INDUSTRIAL: May Lose In Bid For Modernization Project
------------------------------------------------------------
Embattled Mexican construction company Bufete could lose its bid
for a project to modernize one of Petroleos Mexicanos' (Pemex)
plants.

According to a report by Mexican financial daily El Economista,
Bufete may have been slightly outbid by two other companies.
However, due to the closeness of the bids, Pemex Refinacion, led
by Rafael Beverido Lomelin, will review the technical proposals
of the competing companies.

Losing the project would deal a severe blow to Bufete's already
dire financial situation. The company has been pinning its future
hopes on obtaining the Pemex modernization project contract.


CLUB MED: Announces Plan To Axe More Jobs
-----------------------------------------
French leisure group Club Mediterranee said it will cut another
243 jobs, following an announcement in October that it would
close around 15 sites worldwide, Les Echos reported.

Accordingly, the employees most affected are the ones working at
the company Club Mediterranee SA. The group has given its
assurance that it will give its support to the employees who were
made redundant.

Meanwhile, the company will also be creating 52 new posts to
adjust its human resources to its new organization.

In October, Club Med announced that it would close about 15 sites
(villages and villas) in about 10 countries (including Mexico,
the Ivory Coast, Egypt, Greece, Israel and Malaysia), for the
2001-2002 winter season or until further notice.

The company is expected to announce at a later date the closure
of another four or five sites.


GRUPO MEXICO: Analyst Downgrades SPCC On Global Copper Worries
--------------------------------------------------------------
BBVA Continental's Lima-based mining analyst Guillermo Monjaraz
reduced his recommendation on Southern Peru Copper Corp's (SPCC)
stock to `hold' from `outperform', Business News Americas
reported Thursday.

According to Monjaraz, his downgrade will last "until strong
signals of global economic recovery spark a recovery in copper
inventories and pricing trends."

Monjaraz gave a target price of US$12.76 for year-end 2002, an
upside of 15 percent from its current level around US$10.70 on
the Lima bourse.

SPCC recently suffered a downgrade given by international credit-
rating agency Standard & Poor's. The company is asking S&P to
reconsider its cut. The company is a subsidiary of cash-strapped
Grupo Mexico.



XEROX: Fitch Rates Conv. Trust Pref. `B+', Liquidity Improved
-------------------------------------------------------------
Fitch has assigned a `B+' rating to Xerox Corp.'s (Xerox) $900
million convertible trust preferred securities 144A issuance due
2021. Proceeds will be used for general corporate purposes and
debt reduction. The company's and its subsidiaries' (see below)
`BB' senior unsecured debt rating is affirmed. The Rating Outlook
is Stable. The outlook reflects the company's improved liquidity
situation, which provides some cushion for operational shortfalls
as the company continues to execute on its turnaround strategy.
The `B' ratings for Xerox's commercial paper (CP) program and
Xerox Capital de Mexico, S.A. de C.V.'s $200 million `B' U.S. CP
program are withdrawn.

Fitch recognizes the company's improved liquidity, the progress
made in asset dispositions and its $1 billion cost cutting
program, its strong, technologically competitive product line and
business position, its continued effort to improve working
capital management, and the commitment to continue its cost
cutting program beyond the initial $1 billion. The ratings also
consider the company's strained credit protection measures,
refinancing risk of its $7.0 billion revolver due October 2002,
the ongoing Securities and Exchange Commission investigation into
Xerox's Mexican accounting issues and other accounting matters,
and overall weaker economic conditions. Although the company's
financial flexibility has improved with forecasted flat to down
revenues, it is crucial that Xerox executes its cost cutting
programs in order to return the core operations to profitability.

As of Sept. 30, 2001, Xerox's cash position was $2.4 billion with
total debt at approximately $16.1 billion, of which more than
half is from the customer financing operations. However, with the
current proceeds from the convertible trust preferred securities
as well as funds from several planned securitizations of its
financing receivables with General Electric Capital Corp. (GECC),
the company's cash positions should increase substantially. Debt
maturities for the fourth quarter are estimated to be $1.3
billion, with a further $1.3 billion due in the first half of
2002. The company's revolver expires in October 2002 and Xerox is
currently in compliance with all covenants. However, based on
third quarter financial results, the cushion for the company's
tangible net worth covenant was only $182 million, compared to
$1.1 billion at the end of the third quarter of 2000. However,
the current convertible trust preferred offering will increase
the cushion by $900 million, as the covenant definition includes
the issuance as an addition to tangible net worth.

Credit protection measures for the latest twelve months ending
Sept. 30, 2001, show Xerox's leverage, measured by total debt
(including the financing segment) to EBITDA, increasing to
greater than 20 times (x) compared to 14x at Dec. 31, 2000. For
the same time period, the company's core interest coverage
(defined as core EBITDA divided by core interest expense)
declined to less than 1.5x from 2.4x at Dec. 31, 2000. Fitch
anticipates core credit protection measures will continue to be
challenged for the near term, despite continued anticipated cost
reductions from the company's ongoing restructuring programs.

Xerox has made significant progress with its turnaround strategy.
Asset sales have totaled more than $2.0 billion, including an
agreement to outsource approximately half of its manufacturing,
the common stock dividend has been eliminated, and the company
exited the ink-jet market, which was a significant cash drain. In
addition, Xerox continues to make progress in exiting the
customer financing business, with GECC eventually being the
primary source of customer financing in the U.S. and Canada. The
previously announced $1 billion cost cutting program has been
achieved ahead of schedule, including a 10% headcount reduction
from year-end 2000. The company has indicated that it has
identified further cost cuts of approximately $200 million that
could occur in the next two quarters.

In addition to Xerox Corp., the ratings affected are: Xerox
Credit Corp. and Xerox Capital (Europe) plc's rated senior debt.

CONTACT:  Fitch, New York
          For info regarding Xerox Corp.:
          Nick P. Nilarp, 212/908-0649
          Brendan Buckley, 212/908-0640
          For info regarding Xerox Credit Corp.:
          Philip S. Walker, Jr., CFA, 212/908-0624




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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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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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 240/629-3300.


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