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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

            Thursday, November 29, 2001, Vol. 2, Issue 233

                           Headlines



A R G E N T I N A

EPEC: Cordoba Proceeds With Privatization


B R A Z I L

BANCO ECONOMICO: CB Makes Second Attempt To Sell Acominas Stake
EMBRAER: 30% Cut In Outsourcing Costs To Exclude Production
FAZENDAS REUNIDAS: Equity For Debt Proposal Shunned By APVBG
LIGHT: Energy Consumption Up Due To High Temperatures
TELETRUST: Denies Trading Company Status To Avert Liquidation
USIMINAS: Analyst Sees Positive Earnings Outlook, Lower Debt


C H I L E

MUSIMUNDO: Sale Of Chilean Assets Falls Through


C O L O M B I A

VALORES BAVARIA: License Rights Challenge Seen As Positive News


M E X I C O

AEROMEXICO/MEXICANA: 1B-Peso Support Package To Cover Premiums
BANCA QUADRUM: Mexican Banking Group Contemplates Purchase
CYDSA: Flabbergasted On Recent Stock Price Surge
GRUPO SIDEK: Finalizes Asset Auction First Round
HYLSAMEX: Fails To Justify Increase In Stock Price
MEXLUB: Competition Commission Audit Targets Pemex Deal
STARMEDIA NETWORK: Class Action Suit Sites LA Subs' Accounting


P A R A G U A Y

ANTELCO: Pre-Qualification Result To Come Out This Week


     - - - - - - - - - -


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

EPEC: Cordoba Proceeds With Privatization
-----------------------------------------
The governor of Cordoba province Jose Manual de la Sota has
resumed the tender process in order to privatize the electric
company Epec (Empresa Provincial de Energia) with modifications
in the model, Clarin reports.

The revised model seeks an annual fee from Epec's future owner of
between 7 and 10 percent of the Company's annual 330 million-peso
in revenues, instead of a flat payment of 200 million pesos for
the assets.

The regional Cordoba government is looking to sell the Company to
guarantee 202 million pesos from the World Bank and use it to
pass on the provincial bank Banco de Cordoba to Banco General de
Negocios. It plans to conclude the sale in March or April 2002.



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

BANCO ECONOMICO: CB Makes Second Attempt To Sell Acominas Stake
---------------------------------------------------------------
Brazil's central bank, on December 7, is again putting up for
sale the 17.67 percent stake that Banco Economico held in the
Brazilian steel Acominas, says O Globo.

The stake will go on the block at a minimum price of R$426.5
million, substantially lower than the R$489 million established
in its first sale attempt on October 24. The central bank
cancelled the first auction because of lack of bidders.

If the bank sells the shares, it will embark on the final phase
of Banco Economico's liquidation. The central bank is hopes to
complete the liquidation process by next year. According to
figures for last June, Banco Economico still owes the central
bank R$8.7 million.


EMBRAER: 30% Cut In Outsourcing Costs To Exclude Production
-----------------------------------------------------------
The 30-percent cut in outsourcing costs that Brazilian aircraft
maker Embraer plans to begin implementing at the end of this
month won't affect production, according to a union leader,
reports Reuters.

Luiz Carlos Prates, the president of the Sao Jose dos Campos
Metalworkers Union, said that the cuts would primarily impact
areas such as transport, security, and restaurant services
supplied by other firms.

"It will affect the large part of activities that are not
directly linked to production," Prates said, adding that he did
not know how much cash the firm aimed to save.

Metalworkers Union represents a majority of the company's total
workforce.

Embraer, which specializes in the production of planes for the
regional travel market, has already cut staff and plane
deliveries as it succumbed to the crisis in the aviation industry
in the wake of the Sept. 11 attacks on the United States.

The Company has lost several options to sell its planes following
the slump in demand for air travel, but has yet to announce the
cancellation of any firm contracts.


FAZENDAS REUNIDAS: Equity For Debt Proposal Shunned By APVBG
------------------------------------------------------------
The sectoral association APVBG (Associacao dos Fornecedores
Credores da Fazendas Reunidas Boi Gordo), one of the creditors of
Fazendas Reunidas Boi Gordo, rejected the Brazilian firm's
proposal that would have creditors becoming stockholders of a new
company to be created under the name Global Pecuaria S.A., Gazeta
Mercantil reports.

APVBG is among 700 creditors of Fazendas Reunidas Boi Gordo that
have yet to receive their share of the US$50 million owed to
them.

The Company made the proposal in an attempt to exit from a
bankruptcy process it has been grappling with since mid October.

The company's liabilities were listed at R$780 million against
assets of R$500 million.


LIGHT: Energy Consumption Up Due To High Temperatures
-----------------------------------------------------
Brazilian electricity company Light informed that energy
consumption in Rio de Janeiro was cut by just 8.3 percent between
November 21 and November 25, relates O Globo.

The Company pointed out that the swell in demand is due to the
recent high temperatures, citing that the use of air conditioning
on hot days increases electricity consumption.

The energy crisis commission (GCE) recently announced that it
will analyze Brazil's new consumption reduction targets for the
summer individually.

Jose Jorge, mines and energy minister, admitted that there is a
problem with the targets for cities where there is a significant
difference in consumption between the dry season (winter) and the
wet season (summer). According to Jorge, the new targets may be
revised.

The area served by Light has accumulated a 17-percent reduction
in electricity consumption this month, down on the target of 20
percent and the reductions of 20.5 percent and 29.1 percent that
were recorded in October and July, respectively.


TELETRUST: Denies Trading Company Status To Avert Liquidation
-------------------------------------------------------------
In a bid to stave-off liquidation as requested by Brazil's five
largest pension companies, Teletrust claimed that the Company is
not a trading company (one that buys and sells goods or
services), reports O Globo.

Teletrust owes the pension companies US$160 million for a
debenture purchased in 1994 that was guaranteed by telephone
lines.

According to the company's lawyer, Teletrust was created with the
specific aim of making the debenture operation feasible.

The Brazilian law stipulates that only the liquidation of trading
companies can be requested.


USIMINAS: Analyst Sees Positive Earnings Outlook, Lower Debt
------------------------------------------------------------
Shares of Usinas Siderurgicas de Minas Gerais SA (Usiminas) are
expected to recover somewhat after losing 4.8 percent at the
start of the week, suggests Bloomberg.

"We are expecting good financial results in 2002 as its debt will
be lower due to the currency strengthening against the dollar,"
said Luiz Caetano, an analyst at Banco Brascan in Sao Paulo, who
rates Usiminas shares a "buy".

"Operational results next year will probably be good as well.
They should continue to rise."

TCR-LA previously reported that Usiminas is still burdened with
the problems of the restructuring of Cosipa, announced in 1998.

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



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

MUSIMUNDO: Sale Of Chilean Assets Falls Through
-----------------------------------------------
The sale of the Chilean assets of Argentina's biggest music
retailer Musimundo collapsed in the absence of offers, reports La
Nacion.

In a previous report, TCR-LA revealed that three companies
submitted proposals to the Primera Junta de Acreedores to
purchase the assets. These were Chilean companies Playmusic and
La Disquera, and the British firm Griffith.

Musimundo, controlled by Exxel group, filed for creditor
protection in August with a debt load of $206.4 million. The
company was allowed by the courts to continue operating, with
substantial cuts in personnel (40 percent) and salaries (50
percent).

The company did not disclose any alternative plans in the wake of
the failed sale attempt.



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

VALORES BAVARIA: License Rights Challenge Seen As Positive News
---------------------------------------------------------------
Shares of Valores Bavaria SA are expected to rebound on news that
BellSouth Colombia SA, one of its joint venture partners, will
challenge the Colombia government's right to sell more cellular
phone licenses, says Bloomberg.

According to analysts, the new generation cellular phones to be
sold in the auction will make it much harder for existing
cellular phone companies to turn a profit.

Valores Bavaria shares have performed worst of all the stocks
trading on the Colombian Bolsa in 2001 - the share price is down
77 percent this year. The recent weeks following its separation
from Bavaria the brewery have been the worst.



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

AEROMEXICO/MEXICANA: 1B-Peso Support Package To Cover Premiums
--------------------------------------------------------------
Mexico's Communications and Transportation ministry will provide
the one-billion-peso support to the country's struggling airlines
through the Development Bank, reports Mexico City daily Reforma.

According to Raul Cervantes Andrade, a member of the Chamber of
Deputies' Communications and Transport commission, the program
will be specifically aimed at allowing airlines to meet their
higher insurance premiums. The program will last for 180 days,
and could be extended another 180 days.

Cervantes said the financial records of nine Mexican airlines,
including the nation's two largest airlines Aeromexico and
Mexicana, show that the additional costs of insurance, which have
climbed by more than 40 times, are close to US$53 million.


BANCA QUADRUM: Mexican Banking Group Contemplates Purchase
----------------------------------------------------------
Pablo Escalante, VP of financial institution supervision for
Mexico's banking regulator CNBV, said that a Mexican banking
group angling for intervened bank Banca Quadrum, reports Business
News Americas.

"There is interest from a national group in acquiring it
(Quadrum)," Escalante said without revealing the group's name.

The local press speculated that Spanish banking group BSCH was
looking to buy Quadrum, but it now appears those rumors were
unfounded.

"I do not believe Santander is very interested in Banco Quadrum
because our business would add very little value to the entity,"
said a Quadrum source.

CNBV intervened Quadrum and its affiliates in mid-August due to
deterioration in the bank's financial situation and accounting
irregularities.

According to Escalante, CNBV has spent the last few months
assessing Quadrum's financial situation with external auditors
Arthur Anderson, as well trying to clear up administrative and
corporate issues.

The next step in the process is a shareholders meeting, which he
expects will take place 45 days after the commission publishes
the date for the meeting on December 15. At that meeting,
shareholders must decide whether to capitalize the bank, a figure
local press have put at US$80 million.

Should shareholders fail to come up with capital, then deposit
insurance agency IPAB will either clean up the bank and sell it
as a going concern, or liquidate it.


CYDSA: Flabbergasted On Recent Stock Price Surge
------------------------------------------------
Debt-ridden industrial group Cydsa S.A. is as surprised as
analysts are with the recent surge of its share value in the
Mexican Stock Exchange, says El Economista.

In a recent statement, the company said it had no explanation for
the 21.43 percent daily rise in its stock value considering that
sales during the nine months to September fell substantially
short of last year's levels.

Also, during most of the year, the company was forced to dispose
some properties to raise cash in order to pay a US$200 million
bond due next year.

The Company maintains interest in several industries, including
chemical, textile, and packaging, among others.


GRUPO SIDEK: Finalizes Asset Auction First Round
-------------------------------------------------
According to an official company press release, Grupo Sidek, S.A.
de C.V. (OTC Bulletin Board: GPSAY GPSBY) ("Sidek") announced
that the first round of the auction of the assets described in
the Alternative Plan was completed. Of a total 29 lots available
for bidding, 18 lots were sold for a total amount of U.S.
$183,500,000.

In addition, a definitive solution relating to the notes issued
by the special purpose companies, Mexican Acceptance Corporations
("MACs"), was reached today pursuant to which the release of
liens against Grupo Sidek and its subsidiaries representing more
than U.S. $290 million was achieved.

Grupo Sidek said the auction mentioned was completed
successfully.

Finally, the company announced that the shareholders' meeting
convened by a Mexico City court did not occur as a result of a
federal court injunction suspending such meeting.

CONTACT:  Arturo Perez Courtade, Legal Director,
          or Alejandro Giordano Trejo, Deputy Director,
          both of Grupo Sidek, S.A. de C.V., in Mexico,
          011-523-678-5911


HYLSAMEX: Fails To Justify Increase In Stock Price
--------------------------------------------------
Steelmaker Hylsamex SA, a subsidiary of industrial group Alfa SA,
on Tuesday saw its stock price soar 22 percent to 5 pesos,
reports Bloomberg.

However, the Company stated in a press release that it couldn't
find any explanation for the rise.

TCR-LA reported earlier this week that the financially-choked
Mexican firm is reportedly close to finalizing a program that
will restructure its multi-billion-dollar debts.

The program will likely involve Alfa selling part or all of its
share in the subsidiary, which racked up US$2.68 billion in debts
at the end of the third quarter.

But even if a program could be put in place soon, financial
consultant Salomon Smith Barney believes Alfa could still end up
having to pay a US$850 million obligation that matures next year.


MEXLUB: Competition Commission Audit Targets Pemex Deal
-------------------------------------------------------
The audit of Mexicana de Lubricantes (MexLub), which began
October 23, is expected to concentrate on the conditions under
which the Company was given an exclusive contract as the supplier
of motor oils and lubricants to Petroleos Mexicanos' (Pemex) gas
stations, relates Mexico City daily Reforma.

The Federal Competition Commission (CFC) ruled last year that
MexLub's contract with Pemex was illegal. In addition, several
foreign companies have insisted that the deal constitutes a
monopoly. However, MexLub argued that consumers can purchase
competing products from other locations, including mechanics
shops and department stores.

The audit is being handled by Lebrija, Alvarez and Palome, and
should be concluded by December 23.


STARMEDIA NETWORK: Class Action Suit Sites LA Subs' Accounting
---------------------------------------------------------------
On November 27, 2001, Wechsler Harwood Halebian & Feffer LLP
("Wechsler Harwood") commence a class action lawsuit in the
United States District Court for the Southern District of New
York on behalf of all purchasers of StarMedia Network, Inc.
("StarMedia" or the "Company") securities between April 11, 2000
and November 19, 2001, inclusive (the "Class Period"), against
StarMedia, Fernando J. Espuelas (co-founder of the Company,
former Chief Executive Officer, and former Chairman of the Board
of Directors), and Steven J. Heller (former Chief Financial
Officer).

The complaint charges that defendants violated Sections 10(b) and
20(a) of the Securities Exchange Act of 1934, and Rule 10b-5
promulgated thereunder, by issuing a series of material
misrepresentations to the market during the Class Period
concerning the Company's financial performance.

The complaint alleges that StarMedia reported artificially
inflated financial results in press releases and filings made
with the SEC by improperly recognizing revenue in violation of
Generally Accepted Accounting Principles ("GAAP"). Specifically,
the complaint alleges that two of the Company's primary
subsidiaries, AdNet S.A. de C.V. and StarMedia Mexico, S.A. de
C.V, had engaged in improper accounting practices which had the
effect of materially overstating StarMedia's reported revenues
and earnings by at least $10 million. On November 19, 2001, as
alleged in the complaint, StarMedia issued a press release
announcing that based on the "preliminary" results of an internal
investigation into its accounting practices, it expects to
restate its financial statements for fiscal year 2000 and the
first two quarters of 2001 and that those financial statements
should not be relied upon. The Company further reported that its
Chief Financial Officer had "resigned." Immediately following the
announcement of the restatement, the NASDAQ Stock Market halted
trading in StarMedia stock, pending the receipt of additional
information from the Company. StarMedia stock last traded at
$0.38 per share, which is 98.5% less than the Class Period high
of $25.50, reached on April 11, 2000.

Plaintiff seeks to recover damages on behalf of class members. If
you are a member of the Class described above, and if you meet
certain other legal requirements, you may, no later than January
21, 2002, move the Court to serve as a lead plaintiff. A lead
plaintiff is a representative party that acts on behalf of other
class members in directing the litigation. In order to be
appointed lead plaintiff, the Court must determine that the class
member's claim is typical of the claims of other class members,
and that the class member will adequately represent the class.
Under certain circumstances, one or more class members may
together serve as "lead plaintiff." The requirements for serving
as a lead plaintiff are set forth in the Private Securities
Litigation Reform Act of 1995 (15 U.S.C. section 78u-4). Please
note, however, that class members need not seek appointment as
lead plaintiff in order to share in any recovery resulting from
this litigation.

CONTACTS:  Wechsler Harwood Halebian & Feffer LLP
           488 Madison Avenue 8th Floor
           New York, New York  10022
           Phone: 877-935-7400 (Toll Free)

           Shareholder Relations Department:
           Patricia Guiteau
           pguiteau@whhf.com




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

ANTELCO: Pre-Qualification Result To Come Out This Week
-------------------------------------------------------
Paraguay's privatization authority SNRE is expected to release
this week the result of the pre-qualification process for the
sale of state run telco Antelco, SNRE public relations director
Jose Zacchino told Business News Americas.

Zacchino informed five companies presented documents for the pre-
qualification phase of the privatization tender of Antelco set
for next Tuesday.

The five companies are Telefonica Internacional (TISA), Brasil
Telecom, Paraguayan mobile operator Telecel (Millicom), Telecom
Argentina and Compa¤ˇa de Telecomunicaciones - a consortium
composed of Paraguay's Rieder Group and Germany's Detecon.

A consortium of company employees Consorcio de Beneficiarios de
la Opci˘n Preferencial also submitted documents, but the
government deemed their application invalid after failing to
secure US$300 million in financing and come up with a strategic
partner.




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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Information contained herein is obtained from sources believed to
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The TCR Latin America subscription rate is $575 per half-year,
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or balance thereof are $25 each.  For subscription information,
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