Portugal-based Pestana Group Interested in Buying a Fifth of Varig Airline

Portuguese private group Pestana, owner of Euro Atlantic, had a meeting with the Brazilian Government to make an official proposal to buy 20% of Varig, the downtrodden air carrier that´s been struggling with dire financial woes for quite some time now.

However, Brazil´s government had already removed the management of Varig, taking control of Latin America´s No. 1 air carrier, to guarantee the company´s jobs and flight schedule, the country´s airport authority said.

The government plans to issue a decree to take over management of Varig from Fundacao Ruben Berta, a foundation run by the company´s employees.

Varig, which has total debts of about 7 billion reais, won a court ruling this year in a suit seeking 2.24 billion reais in damages from the government for ticket price controls. The airline claimed price controls that were in effect from 1985 through 1992 caused losses in excess of 2 billion reais.