=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/n/a/2005/05/16/financial/= f054935D89.DTL --------------------------------------------------------------------- Monday, May 16, 2005 (AP) Varig to Hold Talks on Rescue Plan (05-16) 05:49 PDT SAO PAULO, Brazil (AP) -- Brazil's flagship airline Varig said Monday it will hold exclusive talks with Portugal's state-owned airline over terms of a rescue plan aimed at preventing the South American carrier from going bankrupt. TAP Air Portugal will negotiate with Varig over a "capitalization plan" aimed at reinvigorating Varig, which is saddled with about 6 billion reals ($2.5 billion) in debt, Varig said in ads printed in major Brazilian newspapers. The airline did not divulge details, but no foreign investor would be ab= le to buy more than a 20 percent stake in Varig under Brazilian law. Brazil's nonprofit Rubem Berta Foundation is the controlling shareholder in Varig, whose full name is Viacao Aerea Rio-Grandense SA. The foundation, representing Varig employees, has an 87 percent stake in the company and has repeatedly rejected efforts in recent years to force it to relinquish control. The foundation warned in the ads that no deal has been reached and that the talks could fall apart. ---------------------------------------------------------------------- Copyright 2005 AP