=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2003/01/31/f= inancial1242EST0115.DTL ---------------------------------------------------------------------- Friday, January 31, 2003 (AP) AIG division seizes Varig plane in Paris for lack of lease payments ALAN CLENDENNING, AP Business Writer (01-31) 09:42 PST SAO PAULO, Brazil (AP) -- Varig, Latin America's largest airline, was trying Friday to negotiate t= he release of a Boeing 777 grounded at Paris' main international airport after it was seized by creditors. The seizure for lack of lease payments to the jetliner's owner, a divisi= on of U.S.-insurance giant American International Group, is yet another sign of Varig's ongoing financial troubles. But the event marks the first time that passengers have been affected. Passengers had been scheduled to fly Thursday on the plane from Paris' Roissy-Charles de Gaulle airport to Rio de Janeiro. After the jetliner was seized, they were instead put on an MD-11 heading from Paris to Rio with a stop in Sao Paulo. Varig's two Boeing 777s are the jewels of its fleet, and were leased from AIG's Los Angeles-based International Lease Finance Co. in 2001. Varig spokesman Paulo Cesar Fonseca declined Friday to provide details of the negotiations and did not know how long it could take for the plane to be released. He insisted that none of the airline's other operations were affected, saying an MD-11 is now being used to cover the seized plane's regular route. AIG spokesman Joe Norton referred comment to an International Lease Finance official who could not immediately be reached Friday to comment. AIG has been in talks to acquire a 20 percent stake in Gol, one of Varig= 's Brazilian competitors, according to Brazilian media reports. Gol, a discount carrier modeled after Southwest Airlines in the United States, launched service in 2001 and is the fastest growing carrier in Brazil's struggling airline industry. Varig is widely viewed in Brazil as the country's national carrier and is a source of deep pride for Brazilians, though the government does not own it. But Varig is struggling under $760 million in debt, and was asked several weeks ago by Brazilian securities regulators to restate financial results for 2001 and the first half of 2002. Government officials found about $371 million in accounting errors. Restatements could widen Varig's 2002 first-half loss to about $571 million from $286 million. Varig has also been the subject of takeover talk because of its financial difficulties. =20 ---------------------------------------------------------------------- Copyright 2003 AP