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Courts take charge of troubled Argentine airline
(EFE Ingles Via Acquire Media NewsEdge) Buenos Aires, Nov 21 (EFE).- The Argentine judiciary on Friday assumed control of Aerolineas Argentinas, responding to a request from the government to "guarantee the normal functioning of the company," Transport Secretary Ricardo Jaime said.
The secretary went to the carrier's corporate headquarters in Buenos Aires to deliver the news in person.
He said the government asked the courts to intervene after Marsans, the Spanish tourism conglomerate that controls Aerolineas, said it planned to install one of its directors, Jorge Molina, as the airline's defacto chief, sidelining Julio Alak.
Thanks to the court action, Alak will remain in charge and transport ministry official Jose Luis Perrone will oversee the company's operations, Jaime said.
Argentine lawmakers passed a bill in September authorizing the government to purchase struggling Aerolineas from Marsans, which acknowledges that the airline is deeply in the red, with debts of $890 million.
But in the face of Marsans' rejection of the value put on the firm by government auditors, Congress voted this week to recommend expropriation of the flag carrier.
Aerolineas and domestic subsidiary Austral together employ some 9,000 people and account for 80 percent of flights in Argentina.
Sources in the transport ministry said that the government, having already pumped some $222 million into the airline, believes it can obtain a majority of shares in Aerolineas without resorting to expropriation.
Word of the judicial intervention came hours after Marsans sent a letter to Argentine President Cristina Fernandez warning that if a "friendly" accord was not reached within a week, the Spanish conglomerate would haul Buenos Aires before the World Bank's International Center for Settlement of Investment Disputes.
Contending that Aerolineas has a negative net worth of $832 million, Argentina says it shouldn't have to pay Marsans anything more than the $222 million Buenos Aires has already handed over to keep the carrier operating.
Marsans, however, points to an estimate by its financial adviser, Credit Suisse bank, valuing Aerolineas Argentinas at between $330 million and $546 million.
The Spanish firm now wants another valuation by an independent third party, but Buenos Aires says it sees no need for that.
Officials speaking on condition of anonymity told Efe that the matter is the subject of high-level contacts between the governments of Spain and Argentina.
Fernandez and Spanish Prime Minister Jose Luis Rodriguez Zapatero discussed the issue last month during the Ibero-American Summit in El Salvador, when the Spaniard said he was confident the two sides could reach a mutually acceptable solution.
Originally state-owned, Aerolineas Argentinas and Austral were privatized in 1990 through a sale to Spain's Iberia.
The Spanish government holding company SEPI took over management of Aerolineas in 2001 as the carrier was on the verge of collapse, and later sold it to a group led by Marsans. EFE
nk/dr
Copyright ? 2008 EFE News Services (U.S.) Inc.
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