LAN Airlines Announces Financing To VRG LINHAS AEREAS S.A.

SANTIAGO, Chile--(BUSINESS WIRE)--LAN Airlines S.A. and its related companies, (“LAN” or “the Company”) (NYSE:LFL / IPSA: LAN), one of the leading airline groups in Latin America, announced today that it has provided a total of approximately US$ 17.1 million in financing to Brazilian company VRG LINHAS AEREAS S.A. (“New Varig”). These loans may be converted into shares of New Varig and if LAN were to exercise its option to convert the loans into stock, the Company would then have a minority stake in New Varig.

New Varig is a Brazilian airline company formed for the purpose of acquiring part of the assets of airline Varig S.A. during the latter’s bankruptcy procedures. New Varig is currently operating in accordance with its technical and operational certification (“CHETA”) which is granted by the Brazilian National Aviation Authority.

LAN in currently involved in ongoing negotiations with New Varig’s shareholders in order to potentially exercise its option to participate in such company through the capitalization of its loans.

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I guess the new Varig will be close to oneworld once the financing deal is done. I wish TAM will join oneworld instead of Varig due to its current limited network.