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Iberia Acquires 60 Percent of Venezuelan Airline

August 9, 1991

CARACAS, Venezuela (AP) _ Iberia Air Lines of Spain and a Venezuelan bank on Friday acquired 60 percent of Venezuela’s debt-ridden airline Viasa for $145.5 million.

Iberia, along with Banco Provincial, Venezuela’s largest bank, bought the stake when no other bids were offered. The government was seeking a minimum $135 million, and Roberto Smith, Venezuela’s transport minister, said he was satisfied with the sale.

The Dutch airline KLM had been expected to bid, but said Friday it regarded the minimum selling price as too high.

Arturo Cardelus, director of Iberia’s Latin American operations, said Viasa would play an important role in the state-owned airline’s plans to upgrade its service between Latin America and Europe.

″Viasa, like Venezuela, like Caracas, is the port of entry for Europe to all of South America, as Madrid is the port of entry for South America to Europe,″ Cardelus said.

Viasa, with eight jets, is the largest of Venezuela’s three airlines and the only one owned by the government. It has routes to 16 countries.

The airline lost $43.5 million in 1990 during the worldwide slump in air travel.

The sale is the fourth in the government’s ambitious progam to privatize 400 companies. Under the terms, Iberia will acquire 45 percent of Viasa’s shares and Banco Provincial 15 percent.

The government had allocated 20 percent to the airline’s 3,564 employees. The remaining 20 percent will be sold gradually through the Caracas stock exchange.

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