Aerolineas Argentinas Headed for Buenos Aires Stock Exchange

Aerolineas Argentinas (AA), a member of Spain-based Marsans Group, has decided to put up to 40 percent of its public capital at the Buenos Aires Stock Exchange (BASE), informed Antonio Mata, president of the company’s executive committee.

The placing of shares will be implemented gradually, beginning with a slice of 10 to 15 percent in August and September. Depending on how demand fares in the face of this move –Mr. Mata says- the number of stocks up for grabs will be augmented to 40 percent tops.

Experts believe that as soon as the air carrier enters the BASE, AA’s public capital will peak $810.3 million.

BASE Deputy President Adelmo Gabbi told local newspaper El Cronista that “chances are the public will be asking for more after the first bidding stage is phased in. They’re going to need to put more shares on the market to meet that demand.”

Market analysts are very upbeat about Mr. Mata’s announcement because an increasingly larger number of bidding companies gives a sense of “transparency” to stock exchange operations. And the timing for AA’s entry to BASE –they say- “can’t be any better.”

At the same time, sources close to the company’s management indicated that AA will pay off the last installment to its debtors (some $100 million) in no more than 60 to 70 days. Coming in debt-free is a must for any company willing to put its shares on the stock exchange market.

Last year, AA netted $43.8 million worth of gross benefits. Estimates for 2004 put those numbers in the neighborhood of $55.9 million.

Just last week, Mr. Mata announced AA’s plans to shell out $192.5 million this year to enhance its fleet, to add more personnel and to help develop airlines in four South American countries -Bolivia, Chile, Paraguay and Uruguay.

The company was in the hands of Argentina’s government until the early 1990s when it was sold to Spain’s Iberia, at the time a state-run carrier, too.

Amid a severe financial crisis, Spain’s State Partnership of Industrial Stocks took control of AA on January 2000, only to pass it on to the Marsans Group on October 2001.

Today, 97.7 percent of the company’s public capital belongs to Interinvest, an Argentine partnership controlled by Air Comet, a Marsans affiliate, with the Argentinean government keeping 1.5 percent of shares and the remaining 0.8 percent scattered among the carrier’s employees.