PPVRA From Brazil, joined Nov 2004, 9059 posts, RR: 37 Posted (10 years 2 months 3 weeks 5 days 12 hours ago) and read 2681 times:
A group of Italian, Portuguese and Spanish investors have presented an informal proposal to invest in RG to the Justice department involved with RG's recuperation procedures (a la U.S. chapt.11). These investors have apparatnly tried to negotiate with RG before, but were left out once RG made an agreement with TAP earlier in the year.
The investors have asked for anonymity for now, therefore, the proposal is not really a valid one as it is not possible to grant any merit to it yet.
The plan would inject USD 90 million in the airline in the short term, with a letter of guarantee from Bradesco bank. The short term injection being critical for RG as they have cash flow problems.
They also plan to inject USD 20 million within the first twenty days, and another USD 300 million in the next ninety days. This all would be in the form of a loan, however a high interest rate would be charged: 11%.
If the size of the airline's financial hole is compatible to the value Rg's management is presenting, up to USD 1 billion could be injected in the airline. If the value is lower, they would get the loan back, which would have RG shares as a guarantee.
A new company would be set up in Brazil to control 70% of the shares (Brazilian legislation only allows 20% foreign ownership). The Ruben Berta Foundation shares, who currently controls RG with 87% of the shares, would be reduced to 10%.
The new offer could put an end to the impasse regarding the sale or VarigLog, RG's cargo subsidiary, which until recently has been stuck in the justice department due to accusations the subsidiary was being sold well below what it is worth, among other theories. However, VarigLog, or VEM, cannot be sold until 28SEP05 when RG presents a recuperation plan.
The national pilots/crew union sees this as an "interesting" proposal as it does not involve selling any of RG's subsidiaries.
RG's management has not yet met with the potential investors as their meeting was cancelled. However, the president of RG's management council, David Zylbersztajn, stated that the fact that they went to the Justice department is a good sign; "they are having a very cautious behavior [Just. Dept.] and the fact that they looked for the Justice [department] is a positive sign."
LipeGIG From Brazil, joined May 2005, 11501 posts, RR: 57
Reply 6, posted (10 years 2 months 3 weeks 1 day 11 hours ago) and read 2295 times:
Quoting PPVRA (Reply 5): 2. RG will not have to pay Infraero daily for airport fees anymore, which costed RG about 1 million BRL per day.
It's concession or " RG's decision " ?
Meanwhile, off-topic, i will be in ATL probably on november 13 and 17 (to and back from MIA). I will fly the new GIG-ATL as DL is offering a good price (US$ 550) to launch the flight on Rio's market. This time will be economy but i expect to fly on Biz on the near future. (note: i expect a lot of new flights like this from Rio!)
I will advise you as soon as i get confirmation.
New York + Rio de Janeiro = One of the best combinations !