Acquisitive Brazilian airline VASP is understood to have made an approach to take a controlling stake in Aerolineas Argentinas. Iberia, which still has an interest in the Argentinian carrier, and which would still need to give its approval for any deal, says that no concrete offer for the airline has yet been made.
VASP's overtures quickly sparked off a round of speculation in Argentina, with newspaper reports naming Continental Airlines and American Airlines as other possible bidders. Neither airline has confirmed an interest.
Aerolineas Argentinas has been looking for new partners since its bungled privatisation several years ago, when Iberia was eventually left holding an unwanted 85%in the carrier. It has since had to reduce its stake to 20%as the price of European Commission (EC)approval of its own state-aid injection. The other 63.4% was transferred in 1996 to Andes Holding, an investment consortium which is owned by US investment banks Merrill Lynch (45%) and Bankers Trust (15%),and the Spanish state holding company Sepi (40%) which also owns Iberia.
Iberia also has the option to repurchase at least part of the Andes stake by the start of 1998, if it meets performance targets laid down by the EC.
It says that its consent would have to be part of any deal struck with VASP.
"There isn't a single firm proposal to buy Aerolineas Argentinas," says the airline, which does not rule out the possibility of a sale.
VASP's expansion in South America over the past year has already seen it take controlling stakes in Lloyd Aereo of Bolivia, Ecuatoroiana de Aviacion of Ecuador and TANin Argentina. Winning control of Aerolineas Argentinas would take the airline's group sales above $2 billion.
Meanwhile, Iberia is also waiting to see if its loss-making Venezuelan partner Viasa, in which it holds a 45%stake, can avoid bankruptcy. Viasa is understood to have only enough cash to stay afloat for another 15 days unless workers agree a harsh rescue plan put forward by Iberia last November. A meeting between unions and management was due to be held on 31 January, before a shareholders meeting on 8 February.
If no agreement is reached on harsh cost-cutting measures, the airline, grounded since late January, will face bankruptcy. The rescue plan involves a $25-30 million cash injection from the state Venezuelan investment fund, which holds 40% of Viasa, while Iberia would write off around $50 million of the airline's $150 million debt, guaranteed against five aircraft.
Source: Flight International
