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."
For the lucky people who understand Portuguese and can skip my translation attempt:
Yet another proposal for RG. Sounds interesting, but it's not yet verifiable. And then there is TAP's new proposal coming in sometime this month...
Cheers and the best of luck for RG!
[Edited 2005-09-03 06:25:51]