Fiat, Brazilian State

Near Debt Swap PactSAO PAULO, Brazil - Fiat SpA of Turin, Italy, and the government of Minas Gerais state are expected to sign a $150 million debt swap agreement this week ending state participation in the Italian company's automaking operation in Brazil.

The agreement would purchase 18.17 percent of Fiat Automoveis SA, located at Betim, Minas Gerais, from the state government joint venture partner and make Fiat SpA sole owner of the plant established there 12 years ago. According to preliminary reports, Fiat will agree to convert $71.3 million worth of international debts held by Brazilian companies into direct

investments in the Betim plant.

The Italian automaker also will pay off another $72.5 million worth of Minas Gerais state government debts owed to Citibank and Lloyds Bank. To complete the package, Fiat also will absorb the $1.7 million cost of civil construction infrastructure at the Betim plant charged to the state government and transfer another $4.5 million representing the cost of real estate in the capital city of Belo Horizonte.

Navy Secretary Webb

Submits Resignation

WASHINGTON - Navy Secretary James H. Webb said the administration had sacrificed its goal of a 600-ship fleet and has submitted his resignation to President Reagan.

Mr. Webb, in a letter of resignation and in a meeting with reporters, said he decided toleave because he could not support the fiscal 1989 Pentagon budget proposal crafted by Defense Secretary Frank C. Carlucci.

He also strongly criticized Mr. Carlucci as a bureaucrat who was not providing leadership to the Pentagon. Story, Page 1B.

US Registers Surplus

Of $16 Billion

WASHINGTON - The U.S. government posted a total surplus of $16.085 billion for January, after a revised $24.216 billion deficit in December, the Treasury Department said Monday. The January surplus compared with a revised January 1987 deficit of $2.116 billion.

The Reagan administration officially projects a deficit of $146.741 billion for fiscal 1988, including an off-budget surplus of $36.773 billion.

The January figure includes an off-budget surplus of $21.933 billion, and an on-budget deficit of $5.848 billion, Treasury said.

In January, the federal government had $81.791 billion in receipts and $65.706 billion in outlays.

EC Moves to Drop

Trade Barriers

BRUSSELS, Belgium - EC foreign ministers Monday approved a negotiating mandate for international trade talks aimed at rolling back restrictions on a variety of goods, as long as other countries, particularly in the Far East, do the same.

Among the products covered by the potential rollback are spoons, forks and chicory.

Henley Group Makes

Proposal for SFSP

LA JOLLA, Cal. - Henley Group Inc. offered to buy $780 million in new Santa Fe Southern Pacific Corp. shares if SFSP would rescind its poison pill defense.

The money, according to Henley's unsolicited proposal, could be used to pay a $5 a share dividend to current SFSP shareholders instead of the $5 senior subordinated debentures to be paid March 1. Because holders of the new shares would not receive the dividend, Henley proposed to pay $17.50 a share.

Under Henley's proposal, 44.6 million new shares would be issued, giving it 35 percent and control of Santa Fe Southern Pacific. One observer pointed out Henley would be giving $5 to each current shareholder and would gain control of the company.

Santa Fe Southern Pacific's board meets today.