Chile's President Sells 3.3 Percent Of LAN
Chilean President Sebastian Pinera moved closer to divesting his holdings in the nation's flagship airline, LAN, selling a 3.3 percent stake for USD$196 million in an auction on Thursday.
Pinera, a centre-right politician who took office on March 11, is selling his holdings in one of Latin America's top airlines to defuse allegations of a possible conflict of interest. He still holds an 8 percent stake through his holding company Axxion and has agreed to sell the firm to Chile's Bethia group in coming days.
Pinera has faced growing criticism over the pace of the sales. His divestment could help him push forward legislation in Congress to speed up the reconstruction of cities and industries destroyed by a massive February 27 earthquake.
The quake delayed Pinera's LAN sale, which he had promised to complete before he was sworn in.
In Thursday's auction, he sold at 9,221 Chilean pesos per share.
At Wednesday's close, the shares had risen 11.6 percent since Pinera's election on January 17, when he held about a 26 percent stake in the airline.
Analysts say they expect few changes once Pinera unwinds his stake, as his former partner, the Cueto family group, will remain the majority stakeholder and manager of the company.
The Cuetos and Pinera transformed a struggling national airline into one of the most profitable carriers in one of the fastest growing regions.
"This is good for both parties. For him (Pinera) because of his role as president and for LAN to have clarified the transfer of that asset." said Claudio Gonzalez, head of research at Tanner brokerage. "This clears the way for both parties to continue with their own work."
The Bethia group, led by the the Solari family, is a key stakeholder in the country's top retailer Falabella and holds investments in businesses that range from wineries to transport firms and horse racing tracks.
Carlos Heller, the vice-president of Bethia, was quoted by local newspaper El Mercurio as saying that the group planned to finance the purchase with its own cash plus credit. He said the group hoped to have one board member in the airline.
Analysts say it is unlikely the Bethia group could have much influence over the company as the Cueto family holds the controlling stake and key managing positions in the airline.