Varig is to seek a minority partner for its VarigLog cargo operation. Bidders are likely to include DHL Worldwide Express, with which the Brazilian flag carrier is discussing a deal to distribute cargo within Latin America.
Some 25-30% of VarigLog is likely to be sold, generating $300-400 million for Varig's owner, FRB-Par, which has debts of $950 million. Ozires Silva, president of FRB-Par and Varig, is to present the plan to the holding company. He says six parties have come forward as potential investors, and the sale is likely to be concluded by the third quarter. VarigLog had sales of $495 million last year, but expects a 20% improvement with the launch of its Velog express delivery service this month.
Source: Flight International