The Uruguayan government has passed a law establishing special rules for the liquidation of PLUNA, S.A., a private company with state participation, speeding up the process which normally takes 120 days or more. There will be a two-step auction held no later than September 10.
TWO-STEP AUCTION
The first step will see the seven company-owned Bombardier CRJ-900's (six more were leased but will be returned to the lessor) auctioned as one lot with a base price of US$ 136 million which is equal to the guarantee that the Uruguayan government gave to the bank (ScotiaBank of Canada) that financed the aircraft purchase. Should there be no bidders for this amount or more, there will be a second base price of US$ 100 million with the Uruguayan government paying the bank for the amount short of the US$ 136 million guarantee.
The second step will be that the winning bidder of the aircraft will negotiate with the government to acquire PLUNA's former route rights and take on its employees.
PLUNA's employee unions have requested that US$ 12 million, equal to the amount of unpaid employee backwages, be added to the auction amount.
CREDITORS
The first priorities of the auction are to pay off the secured loans on the aircraft and employee backwages followed by the other creditors, including ANCAP (Uruguayan national producer of petroleum and alcohol products) which is owed US$ 27 million for fuel, the Banco de la Republica Oriental de Uruguay (state bank) owed US$ 15 million in loans, and the estimated 70,000 passengers that paid some US$ 7 million for their tickets in advance. However, it is doubtful that there will be much money, if any, available after the aircraft loans are paid.
POTENTIAL BUYERS
There are reportedly two parties interested in participating in the auction, BQB Lineas Aereas and Grupo Eurnekian, which owns the Aeropuertos Argentinos 2000 airport franchise operating nearly all of Argentina's major airports that have commercial service. There were also rumors at one point that LATAM, the newly-merged entity of LAN and TAM, is interested in acquiring the aircraft, but the editor of this blog believes that is doubtful since neither carrier operates the CRJ series of aircraft plus the MVD-based hub operation would be of questionable value to the Chilean/Brazilian airline as it might compete with its existing services more than being a new business opportunity.
ALTERNATIVE
If no companies bid on PLUNA's former assets, the new law allows the state to negotiate with private investors to form a new carrier with 25% state participation, similar to the partnership established with Leadgate several years ago, but still with the obligation that creditors be paid and PLUNA's former employees rehired.
Source: El Pais Uruguay - several articles 09-12Jul12
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