Web Hosting

Argentina Backs Airline Seizure

Posted in Aerolineas Argentinas, Airline NewsNo comments

Argentina’s lower house of Congress has approved legislation to seize the country’s biggest airline, Aerolineas Argentinas, from its Spanish owners.

Deputies voted 152 to 84 for the bill, which now goes to the Senate.

Spanish firm Grupo Marsans agreed in July to sell the debt-laden airline back to the state but the two sides failed to agree on a price.

The government says it wants to protect a public service. Marsans says it will seek compensation for any takeover.

The vote in the lower house of Congress on Wednesday is the latest development in the troubled history of Aerolineas Argentinas, which was first privatised 18 years ago.

The carrier, which according to the government has debts of some $900m (£619m), has been hit by industrial disputes and chronic flight delays and cancellations for months.

Supporters of the expropriation measure say it is needed to safeguard jobs and protect a vital service for the country.

Aerolineas Argentinas and its subsidiary, Austral, employ around 9,000 people and operate about 80% of domestic flights.

Value row

The draft law designated the two companies, both owned by Madrid-based Grupo Marsans, as a “public utility”.

The bill now goes before the Senate, where Transport Secretary Ricardo Jaime says he expects it to be approved by the end of the month.

The Argentine government and Marsans signed an agreement in July to renationalise Aerolineas, which the Spanish firm bought in 2001 for a symbolic dollar when it was on the verge of bankruptcy.

But the two sides have not been able to agree on the value of the company, nor who would take on the debt.

A congressional committee recommended that the two be simply taken over, arguing that they were worthless.

Marsans, which says an audit it commissioned from Credit Suisse put the combined value at around $450m, has vowed to seek compensation at the World Bank’s arbitration tribunal should the takeover proceed.

The company says it has invested some $900m in the company.

Expropriation would be another move by Argentina’s centre-left government to increase state involvement in key public sectors that were largely privatised in the 1990s, correspondents say.

Last month, President Cristina Fernandez signed a bill to nationalise the country’s 10 private pension funds, putting almost $30bn (£20bn) of investments under government control.

Leave a comment

Vous must be registred to post comments.

Hosted By Vodien Internet Solutions