Varig's shareholders were expected to approve a sale of 20% of the airline group at a special shareholders' meeting as Flight International went to press, to fund the struggling airline.
Majority owner with 87%, FRBPar Group, which also owns Brazilian domestic airlines Rio-Sul and Nordeste, cannot afford to put any more money into loss-making Varig, which has debts close to $1 billion.
Shareholders were voting on changing the airline's statutes to allow it to sell up to 20% of the group, which includes cargo division VarigLog and its VEM maintenance branch.
Analysts say interested parties include Brazilian bank Banco Pactual and General Electric. But any sale would need approval from the attorney general for the State of Rio Grande do Sul. There are concerns that FRBPar will transfer full or partial control of Varig to a new, possibly foreign, partner.
FRBPar is also facing opposition from the Varig pilots' union, which alleges that FRBPar has funnelled assets into subsidiaries while concentrating nearly 85% of the group's liabilities on Varig.
Source: Flight International
