Varig changes board before TAP acquires 20% stake

23 November 2005

Lisbon, Portugal, 23 Nov – The former logistics director of Brazilian air carrier Varig, Humberto Rodrigues Filho, is expected to become the company’s chairman, replacing David Zylbersztajn, who was fired by the Ruben Berta Foundation, Varig’s main shareholder, Portuguese business daily Diário Económico reported.

Humberto Rodrigues Filho is considered to be close to TAP – Air Portugal’s chairman, Fernando Pinto.

Changes in the board of directors of Varig are also expected to lead to representatives of the company’s creditors becoming part of the board, reported Diário Económico.

On December 19 a creditors meeting is due to vote on the recovery plan for Varig proposed by TAP. The plan proposes that the Portuguese carrier acquire a 20% stake in the company together with Geocapital, a company controlled by Macau businessman Stanley Ho.

Two days after that, a New York court is due to review its decision to suspend the seizure of 40 aircraft, currently being leased by Varig, which ahs failed to keep up with payments.

At the beginning of the week TAP took on the management of two Varig companies, VarigLog (transport and cargo) and VEM (engineering and maintenance).

Diário Económico adds that the two companies TAP is buying from Varig will be headed up by Brazilians Luiz da Gama Mor, TAP’s vice president and Michael Connoly, TAP’s financial director. VEM’s board will also include António Sobral, the man mainly responsible for TAP’s engineering and maintenance arm.

The process for acquiring VarigLog and VEM may still be overturned if within a month another investor puts forward a proposal to buy the two companies for at least 20% more than TAP has offered. (macauhub)