Ok, so here goes my translation from the article (for those who can speak portuguese and would like to skip my attempt in translating this, skip to the bottom of the page for the link):
Folha de S. paulo is SP
's main newspaper and one of the most respected nationwide.
Folha: Is there an alternative for RG, after TP pulled out?
David Zylbersztajn (DZ from now on): TP
was one of the alternatives, but not the solution. From the moment RG
entered the "chapter 11" process the previous model [RG
+TP] did not make sense anymore. RG
's problem is strictly financial. The company has a huge debt. The Ruben Berta Foundation [RG
's main shareholder] is conscious about the problem and accepts selling their share on the company. RG
is operationally equilibrated and healthy. In the first trimester RG
had a result of BRL
150 million, which is better than the other companies together. The problem comes when you factor in the debt,a negative patrimony of BRL
6 billion, and debts that goes from BRL
7 to BRL
9 billion, depending on the index of correction (help in translating this last sentence plz!). The government holds 65% of the debt. The company has credits to receive from the govt. worth some BRL
[skipping a long comparison]
[talking about BR
fuel, stated owned creditor]... Varig is a "megaclient." Only from BR
, we buy USD 600 million worth in fuel per year. You don't waste a USD 600 million client.
Folha: Why did RG opt for the bankruptcy filling?
None of the proposals we received assured of short-term capital investments. A solution like TP
's would need new capital. As this capital didn't come, trying to cancel off debt with with government would take took long, we decided for the restructuring law.
Folha: The [ a govt. body, don't know how to translate "Fazenda"?] refused the canceling of debts deal?
DZ: No. They worked a lot with us. They proposed a deal, but it would take too long. But they did collaborate and are giving support for RG
[Skipping unimportant political rumors dismissal part]
Folha: What guarantees that the Ruben Berta Foundation will not change their minds later and not sell their shares?
Quick explanation:The govt. has stated that no "canceling off debts" deal will happen if FRB doesn't lose control of the airline
is creating a trustee that will take care of those shares and be able to sell them afterwards. In the new RG
, the FRB will only have a minority stake. Only as an investor. Our proposal is that the trustee be formed by 4 counselors and 3 members. The four counselors would include me... [three others brought by DZ to RG
's board]. The idea is that FRB would in the end only hold 10% of the shares. This way, RG
will n theory not be owned by any single group, demanding a much stronger type of management. If from the 90% to be sold, 20% will go to a foreign investor, which is the limit by law, plus another 30% to a strategic investor, and the other 40% to would go to the market.
Folha: But how is an investor going to be interested in a company in debt and with a negative patrimony?
The model we re studying takes into consideration reducing substantially our debts. It's not magic, but a societary reorganization. Like any creditor, the government, if there is an agreement they will lose some, as it is normal in a situation like this. If RG
stops flying, the government will lose 100%. We must measure an equilibrium point between the possibility of paying and what there is to receive. If the creditor wants to receive everything, they won't get any.
[Skipping unrelated comments about the competition]
Folha: Will there be many layoffs?
I can't negate that possibility. I can't say there won't habve any, but there are also other alternatives. RG
's pilot association told us that, if they go for layoffs, they would be ok with paycuts instead.
[End of interview, skipping personal comments...]
So there you go guys. As for why I took the time to translate all this? It's because I love you guys! No, just kidding, I couldn't sleep, so I figured what the hell...