DOW JONES NEWSWIRES
September 21, 2005 9:12 a.m.
SAO PAULO -- A local Brazilian court has received a formal proposal from a businessman interested in assuming a controlling stake in financially troubled airline Viacao Aerea Riograndense SA (VAGV4.BR), or Varig, local business dailies reported in their Wednesday editions.
Brazilian businessman Nelson Tanure offered a total of $202 million in two tranches to assume control of the airline. In the first tranche, the businessman would invest $100 million to acquire 25% of shares currently held by the Ruben Berta Foundation, which controls 87% of Varig's shares. The second tranche would involve a $12 million payment in exchange for the right to name members of the board of directors of the company for a period of 10 years.
During the 10-year period, Tenure would invest an additional $90 million to acquire more shares, according to the proposal.
Earlier this month, Varig presented a business plan to a Rio de Janeiro bankruptcy judge designed to reorganize the company and attract new investors.
The move came nearly two months after Varig filed for bankruptcy protection under a new bankruptcy law, passed in 2004, designed to speed up procedures while encouraging negotiations with creditors.
Varig, which has total debts of 7.7 billion Brazilian reals ($1=BRL2.30), has also received investment feelers from TAP Air Portugal.
-By Rogerio Jelmayer, Dow Jones Newswires; 55-11-3145-1480;
[email protected]