/raid1/www/Hosts/bankrupt/TCRLA_Public/020102.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

             Wednesday, January 2, 2002, Vol. 3, Issue 1

                            Headlines


A R G E N T I N A

ACINDAR: Argentine Crisis Not A Heavy Burden
ALPARGATAS SA: Financial Difficulty Prompts Protection Filing
ARGENTINE BANKS: Still In Hot Water, Says Banking Analyst
ARGENTINE BANKS: Argentines Protest Account Freezing Measures


B R A Z I L

EMBRATEL: Signs Three Year Contract With Cerj
TRANSBRASIL: TAM's Takeover Proposal Hinges On Conditions


C H I L E

EDELNOR: CPG Needs To Increase Offer To Remain In Race
TELEX-CHILE: Minority Shareholder To Assume Control


E C U A D O R

BANCO DEL PACIFICO: Central Bank Postpones Privatization


P A R A G U A Y

CORPOSANA: Government Releases Criteria For Bidding


T R I N I D A D   &   T O B A G O

BWIA: Guyana Flag Carrier Status Meets Strong Opposition


V E N E Z U E L A

SIDOR: Ominous Liquidation To Cost Usiminas $123M
SIDOR: Lobbying For Protectionist Measures
SIVENSA: Seeks Approval of Debt-Restructuring Plan By January



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

ACINDAR: Argentine Crisis Not A Heavy Burden
--------------------------------------------
Brazilian investment bank Brascan believes that Brazilian
companies with interests in Argentina will escape without much
damage from the crisis plaguing the country.

Brascan cited Belo Horizonte-based Belgo-Mineira (longs), which
has a $131-million investment and 21 percent stake in Buenos
Aires steelmaker Acindar (longs).

Despite defaulting, Acindar continues to operate normally and
Belgo has stated it does not believe the Argentine company will
go into liquidation.

"When we did the deal, that country was already facing
difficulties. But Acindar is strategic in our plans for the
continent, now reinforced by Arcelor's global strategy," said
Belgo president Antonio Jose Polanczyk. Belgo has just become
part of the new Euro steel giant.

Belgo has told the Sao Paulo Stock Exchange (Bovespa) that
Acindar possesses solid industrial fundamentals and knows how to
adopt the necessary measures to survive the current difficulties.

"The truth is that, as the examples of [crises in] Mexico, the
Asian tigers, Russia and even Brazil itself show, the sooner the
unsustainability of a situation is recognized, the quicker the
recovery starts. Thus [Argentina's] 'bankruptcy' begins to offer
a glimpse of the recovery just over the horizon," Brascan said in
a report.

CONTACT: Investor Relations Manager
          Lic. Jos‚ Giraudo
          Tel: (54-11) 4 719-8674
          Fax: (54-11) 4 719-8501 Int. 8674

          Brazilian Contact
          Productos Industriales
          V¡a de acesso Joao de G¢es, 1950
          (06600-000) Jandira
          Sao Paulo, SP - Brasil
          Tel.: (55-011) 7929 3699
          Fax: (055-011) 7929 3579


ALPARGATAS SA: Financial Difficulty Prompts Protection Filing
-------------------------------------------------------------
Economic depression has taken its toll on Alpargatas SA, an
Argentine footwear and textile firm.

According to an AFX report, Alpargatas filed for creditor
protection due to the ongoing economic depression in Argentina,
which is reflected in decreases of 16.4 percent in national
textile output over the past five months, the loss of over 16
percent of garment and footwear sales at shopping centers, and 13
percent at supermarkets. The industry statistical information was
revealed by chairman Guillermo Gotelli, citing the national
statistics institute INDEC.

The filing was also blamed on the Company's difficulty in
obtaining new financial sources for working capital due to
pressures from lenders who did not accept the restructuring
completed a year ago.

"The impossibility to obtain new financial sources for working
capital...is the consequence of the risk that exists in the face
of the legal impossibility to extend to creditors who had not
accepted the financial restructuring, the scheme accepted by 96
percent of the Company's creditors (on Dec 26, 2000)," Gotelli
said.

The amount owed as non-restructured credits is about 33 million
pesos. This is "not a significant figure for Alpargatas' history,
in relation to its current invoicing, and obviously for its
liquidity, and vis-a-vis the amount of restructured debt that
totals some 85 million pesos," he noted.

"The board cannot ratify repayment plans that are substantially
more generous than those applied in the restructuring,
...especially if the former affect the Company's operational
capacity," Gotelli said.

With credit unavailable at normal interest rates, Alpargatas had
to resort to "marginal markets to discount cheques and other
paper at exorbitant rates," he added.

Government authorities have not met their commitments "to restore
credits owed by the state, to be used as tools toincrease working
capital that growth requires," Gotelli said.

Alpargatas ended September with a debt of 469 million pesos and
with a book value of equity of 27.4 million. Net loss during the
nine-month period ending September 30 narrowed to 69.4 million
pesos, from 135.1 million a year earlier, while consolidated
sales fell 64 percent to 31.7 million pesos.

All its factories were closed from Jan to May, when all plants
were reopened with the exception of the injected footwear
facility at Catamarca, which had been most affected by imports
from Brazil, Gotelli said.


ARGENTINE BANKS: Still In Hot Water, Says Banking Analyst
---------------------------------------------------------
The contained impact of the Argentine government's default on its
$155-billion-debt (federal and provincial) doesn't erase doubts
that the country's banks may run into serious insolvency
difficulties, says Business News Americas.

President Adolfo Rodriguez Saa, the country's new interim
president, informed that Argentina would cut short its debt
service and instead direct that money to social spending in order
to avoid renewed social unrest.

The banks have, of course, suffered from the default and will
continue to suffer but the default in itself did not hurt banks
as much as initially expected.

"The difference from Russia's (1998) default was that this time
there was a lot of time to prepare," Santander Investment banking
analyst in New York Patrick Boucher said, adding, "you knew it
was coming."

However, according to Lehman Brothers' director of Latin American
equity research Robert Lacoursiere, the banks have tough times
ahead because the default will have a negative effect on the
already depressed economy and that will impact balance sheets.

The banks' financial health is still at risk as the threat of
devaluation looms.

"Everything (loans) is in US dollars and devaluation is still a
valid fear," he said. "Banks are not out of the water yet -
that's the bottom line," he added.


ARGENTINE BANKS: Argentines Protest Account Freezing Measures
-------------------------------------------------------------
Thousands of Argentines gathered in front of the Government House
to protest a month-old limit on cash withdrawals from banks,
reports AP.

The spontaneous protest marked the second such display of anger
by Argentina's struggling middle class since a similar protest
held recently helped topple the presidency of Fernando De la Rua.

The protest began after Argentines flooded the banks Friday,
forming long lines and shouting for their money after the
government eased a five-day banking holiday that had shut off
most routine financial transactions.

Anger over the banking restrictions and a failed attempt to
overturn them in the courts stoked the protest, according to one
demonstrator, Maria Luisa Lerer, 64. Some 1,000 people gathered
outside the government palace and on street corners in rejection
of government economic policies.

A deep-rooted economic crisis is fueling rising tension among
depositors as a days-old government maintains a freeze imposed
Dec. 1 limiting bank cash withdrawals to $1,000 a month.

Meanwhile, the Buenos Aires stock market reopened Friday for the
first time since deadly rioting and looting forced Fernando De la
Rua from office last week. The Merval Index of leading shares was
off 7.8 percent at closing.



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

EMBRATEL: Signs Three Year Contract With Cerj
---------------------------------------------
Embratel, the Brazilian long-distance telecommunications company,
has won a 3-year contract with Companhia de Eletricidade do Rio
de Janeiro (Cerj), a Brazilian electricity distributor, reports O
Globo.

The contract, the value of which was not disclosed, will see
Embratel providing a 0800 free call system to the call centers of
Cerj. In addition, Embratel will also merge Cerj's call centers
in Brazil and Latin America.

Embratel has piled up debts of R$2.6 billion at the end of the
third quarter. Almost 100 percent of that debt is in foreign
currency. Rumors concerning a possible sale of Embratel are still
circulating in the market.

To see company's financial statements:
http://www.bankrupt.com/misc/Embratel.pdf

CONTACT:  Embratel Participacoes S.A.
           Investor Relations
           Silvia M.R. Pereira, (55 21) 2519-9662
           fax: (55 21) 2519-6388
           invest@embratel.com.br
           or
           Press Relations
           Wallace Borges Grecco, (55 21) 2519-7282
           fax: (55 21) 2519-8010
           cmsocial@embratel.net.br


TRANSBRASIL: TAM's Takeover Proposal Hinges On Conditions
---------------------------------------------------------
Transportes Aereos Regionais SA (TAM), Brazil's No. 2 airline,
said it would hire the 1,200 workers of the debt-laden
Transbrasil SA Linhas Aereas if the latter loses its operating
license for failing to resume operations before the beginning of
January 2001, O Globo reports.

But the plan, according to TAM President Daniel Mandelli Martin,
hinges on the condition that TAM be allowed to use Transbrasil's
hangars, operate its routes and obtain the license to land and
take off from a number of airports, especially Congonhas airport
in Sao Paulo.

The plan has been presented to two airline workers unions, who
will forward the proposal to Brazilian President Fernando
Henrique Cardoso, according to Graziella Baggio, head of the
National Airmens Union.

"TAM's interest in the business is to hold Transbrasil's
concessions, which according to the market involves 47 slots out
of Sao Paulo alone," Baggio said. TAM, in turn, would
redistribute the new personnel among the 50 new planes it will
receive next year.

Martin has also said that TAM will not assume Transbrasil's
R$910-million debt.

Transbrasil halted flights earlier this month after failing to
come up with enough cash to buy fuel. The Company has, so far,
been unable to renew its fuel contract.



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

EDELNOR: CPG Needs To Increase Offer To Remain In Race
------------------------------------------------------
Chilean firm Los Choros Power & Gas (CPG) needs to sweeten its
offer to purchase Edelnor in order to match the two competing
offers and continue in the race for the debt-ridden Chilean power
generator, market sources suggested.

Previous reports revealed that the Chilean firm Del Sol Mercados
Futuros offered to pay $4.5 million for the purchase of Mirant's
stake in Edelnor. The bid matches the revised offer made by
Chile's Inversiones y Asesorias Titanium. Both Titanium's and
Futuros' offers exceed by $1 the offer made by CPG.

Edelnor is considered a prized asset as it operates in Northern
Chile, where much of the country's huge copper mining industry is
located. The fly in the ointment is that it is buried under a
$340-million debt.


TELEX-CHILE: Minority Shareholder To Assume Control
---------------------------------------------------
The control of Telex-Chile will be transferred to one of its
minority shareholders, US-based investment fund Southern Cross
(18.6 percent) and US-based GE Capital, as agreed by the
creditors of the debt-ridden Chilean telecoms holding company.

According to a Business News Americas report, the plan must be
voted on by the creditors' shareholders within 30 days.

Meanwhile, the Company's creditors also agreed on a $378.2-
million capital injection to be carried out through the
capitalization of Telex's debts.

The agreement, which must be confirmed by a shareholders meeting
to be held within 30 days, mandates that the capitalization must
equal at least 70 percent of Telex's debt and 85 percent in the
case of its subsidiary Chilesat. The agreement allows 270 days to
complete the process.



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

BANCO DEL PACIFICO: Central Bank Postpones Privatization
--------------------------------------------------------
The privatization of Ecuadorian bank Banco del Pacifico, which
was expected to take place this year, has been postponed by the
Central Bank, Pacifico's sole shareholder, reports El Universo.

The Central Bank said privatization would be delayed as it is
awaiting the legal framework to sell it off.

Prior to its privatization however, Pacifico needs to reinforce
its capital by $120 million, of which $76 million is to come from
CAF (Corporacion Andina de Fomento), and the remainder through
bonds issued by the Central Bank. Capitalization is expected to
be completed in by February.

Banco del Pacifico has been managed by Interdin & Ahead Advisory
Group since October. The Group's takeover was expected to make
Banco del Pacifico more attractive to foreign investors.

The bank reportedly has assets of $497.7 million, liabilities of
$433.8 million, and deposits of $235 million.



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

CORPOSANA: Government Releases Criteria For Bidding
---------------------------------------------------
The Paraguayan government released the criteria that interested
companies should follow in order to qualify in the privatization
of the water supply & sanitary services company Corposana,
reports Noticias.

According the criteria outlined by BSCH, bidders must meet the
following qualifications:

- Must have minimum net assets of $100 million and a secure
banking credit of $200 million,

- Must render similar services to no less than 1 million
inhabitants,

- Must manage at least 200,000 connections of water or sewage
services.

The schedule of the tender points to early January, while the
issuance of the tender terms and qualifying by end February.

The government expects to raise no less than $50 million for
Corposana's assets.

The Company, which manages 180,000 connections and has 1,258
employees, has accumulated debts of $190 million payable over the
next 30 years

The Paraguayan government plans to end Corposana's privatization
by June.



=================================
T R I N I D A D   &   T O B A G O
=================================

BWIA: Guyana Flag Carrier Status Meets Strong Opposition
--------------------------------------------------------
There have been strongly expressed views against awarding
Trinidad airline BWIA flag carrier status for Guyana since it was
a foreign-based airliner and its service left much to be desired,
reports The Stabroek News.

Public relations consultant in the Ministry of Transport and
Hydraulics, Ajay Baksh explained that airlines with flag carrier
status benefit from reciprocity agreements.

According to Mr. Baksh, such a status also serves as a marketing
tool for the country and the airline.

Meanwhile, according to a top Guyana government official, nothing
further has developed since BWIA expressed interest in obtaining
limited flag carrier status for the country.



=================
V E N E Z U E L A
=================

SIDOR: Ominous Liquidation To Cost Usiminas $123M
-------------------------------------------------
Analysts at Brazilian investment bank Brascan warned that the
Brazilian flat-steel maker Usiminas stands to lose $123 million
in loans, guarantees and book value if Venezuelan integrated
steelmaker Sidor goes into liquidation, according to a report by
Business News Americas.

The comment came in an analysis on the possible effect for
Brazilian companies after Argentina defaulted on international
loans.

Belo Horizonte-based Usiminas has a 5.68-percent stake in Buenos
Aires flat-steel maker Siderar. Siderar and Usiminas are two
members of the five-partner multinational Amazonia consortium
that controls Ciudad Guayana-based Sidor.

Sidor and Amazonia defaulted on $39.4 million of interest
payments between them, Amazonia's Mexican member Hylsamex told
the Mexico City bourse just before Christmas. Amazonia-Sidor are
renegotiating the debt with lenders. Hylsamex is doing the same
for its $1.1 billion debt.


SIDOR: Lobbying For Protectionist Measures
------------------------------------------
Gaston Montiel, a spokesperson of Siderurgica del Orinoco
(Sidor), revealed that the Venezuelan integrated steel producer
is urging the government to apply protectionist measures before
year-end, relates Business News Americas.

Sidor believes that the country needs to defend itself against
similar measures being taken elsewhere. The spokesperson also
noted that Venezuela's imports in November reached their highest
level for any month in 2001.

Meanwhile, a US International Trade Commission investigation has
recommended that president George W. Bush impose a series of
tariffs and quotas on steel imports. The president has until
February 19 to decide.

"If Venezuela does not act in time, the steel industry in the
Guayana region and the country's center will suffer the same
consequences as that experienced by North American producers
which, weighed down by dumped imports coming from Asia and
Eastern Europe, have closed their gates for good," said Montiel.


SIVENSA: Seeks Approval of Debt-Restructuring Plan By January
-------------------------------------------------------------
Siderurgica Venezolana (Sivensa) will hold an extraordinary
shareholders' meeting on January 25, 2002 to discuss issues that
are critical to its financial survival.

According to a report by El Nacional, the largest publicly traded
steel company in Venezuela, aims to approve a debt-restructuring
program during the meeting.

Additionally, the Company will also count the debt of its filial
Siderurgica del Turbio, S.A. (Sidetur) within the deal.

Sivensa has already renewed debt-restructuring talks in January,
less than a year after it refinanced $245.8 million in debt with
15 banking creditors and 2 development agencies.

Sivensa's ability to service its debts has been hampered by
falling prices for steel and hot iron briquettes, which are used
to boost the iron ore content of scrap metal used by mini-mills.




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 2002.  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
be reliable, but is not guaranteed.

The TCR Latin America subscription rate is $575 per half-year,
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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