As part of their ambitious expansion plans, Aerolineas Argentinas and two of Brazil's three airlines – TAM and GOL – will offer shares on the capital markets before the year end.
Significantly, Aerolineas has never sold shares before and less than 1% of TAM's shares are publicly traded. Spain's Marsans group, the travel giant that holds 98% of Aerolineas, has several reasons for floating the airline. First, by increasing the Argentinian stake in Aerolineas, it hopes to reduce some of the hostility the airline faces from its status as a foreign-owned firm. Second, proceeds from an equity sale will help the Marsans group fund other Latin American ventures.
Marsans has already created Aerolineas del Sur in Chile and hopes to start a similar airline in Peru. It also has its eye on an airline venture in Colombia. Antonio Mata, president of Aerolineas, foresees these start-ups joining Aerolineas and forming what he calls "one of the leading aviation groups in Latin America".
Marsans has retained Spain's Banco Galicia to sell a 15% stake in Aerolineas to five Argentinian institutional investors. This private placement is designed to cement relations with Argentina's business community before an initial public offering of another 30% later this year. These combined offerings will generate an estimated 350 million pesos ($122 million) and leave the Marsans Group with a 53% stake in Aerolineas.
TAM has released few details so far on its plan to raise R$900 million ($360 million) from a public offering later this year, but of this amount, apparently 30% will come from a sale of existing shares with the 70% balance from a new issue. TAM has taken a clear lead among Brazil's domestic airlines as Varig's woes continue and the grounding of VASP leaves an opening. TAM now claims to carry 46% of all domestic passengers, a record high. The airline's 2004 financial results also set a record with a net income of $128 million and TAM plans significant international growth.
GOL, which is already publicly traded, plans to raise another estimated $240 million through the sale of preferred shares to fund its ambitious expansion plans. GOL and its shareholder AIG Capital Partners recently raised R$516.3 million ($204.7 million) with the sale of shares as the carrier expands its fleet and confirms its status as Brazil's second largest airline.
DAVID KNIBB SEATTLE
Source: Airline Business
