November 21, 2008 / 6:27 PM / 9 years ago

Argentine court intervenes in Aerolineas Argentinas

BUENOS AIRES, Nov 21 (Reuters) - An Argentine court agreed to oversee the day-to-day running of the country’s main airline on Friday amid signs the government is moving to expropriate the carrier from its Spanish owners.

Argentina is in talks to take over Aerolineas Argentinas, owned by Spanish travel group Marsans. But negotiations have broken down because the two sides failed to agree on how much the company was worth.

The court appointed a temporary administrator for the airline at the government’s request, but it was not immediately clear how far-reaching his powers would be.

Gaining control of Aerolineas marks another step by Argentina’s center-left government to increase state or local investor participation in companies tied to key economic sectors that were largely privatized during the 1990s.

The judicial decision comes three days after an Argentine congressional committee urged President Cristina Fernandez to expropriate the airlines after months of tense negotiations between the government and Marsans.

Marsans agreed in July to sell Aerolineas Argentinas and its Austral unit to the government.

But talks collapsed after two audits determined widely disparate values for the companies, which employ some 9,000 workers and operate about 80 percent of the country’s domestic flights.

Argentine officials have said the government should not have to pay for the airlines, arguing their debt load of an estimated $890 million exceeds their value -- a charge Marsans denies.

The company has called for a third audit as laid out in the original accord, but the government has refused, saying a law passed by Congress did not require such a move.

Marsans threatens to take its case to the World Bank’s International Center for Settlement of Investment Disputes if the government expropriates the airlines.

For months, Aerolineas has been plagued by strikes and flight delays.

Aerolineas was on the verge of bankruptcy in 2001 when Marsans bought it from a group controlled by the Spanish government. The carrier was first privatized in the early 1990s. (Writing by Kevin Gray; Editing by Andre Grenon)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below