January 22, 2010 / 12:42 PM / 9 years ago

Chile's Pinera to put LAN proceeds in blind trust

* Pinera to place LAN stake proceeds in blind trust

* Funds to be placed in new blind trust or existing one

* LAN stake sale to be complete before March 11

SANTIAGO, Jan 22 (Reuters) - Chile President-elect Sebastian Pinera will place an estimated $1.5 billion to $1.6 billion raised from the planned sale of his stake in airline LAN in a blind trust, his holding company said.

Fernando Barros, the president of Pinera’s holding company Axxion AXX.N, had said on Thursday the conservative billionaire planned to invest the proceeds at home and abroad, and not in a blind trust.

However, Barros reversed his stand in a statement overnight. Pinera won Chile’s presidency on Sunday and has repeatedly said he would avoid any conflicts of interest stemming from his wealth while in power.

Under a blind trust, a third party manages investments without any involvement or influence of the investor.

“The funds raised from the sale of the LAN shares ... will be administered by ... a new blind trust or an existing one,” Barros said.

Pinera has already placed hundreds of millions of dollars worth of investments in a blind trust, and he has vowed to sell all his LAN LAN.SN LFL.N shares before he is sworn in on March 11.

Barros said on Thursday Pinera would earn between $1.5 billion to $1.6 billion from the sale of his 26.3 percent stake in LAN.

Axxion holds a 19 percent stake in the airline. Another Pinera holding company, Santa Cecilia, owns an additional 7.3 percent.

Under a controlling shareholder pact, Pinera must first offer his stake to Chile’s Cueto family group, which has the second-biggest investment in LAN, at 25.5 percent.

On Wednesday, the Cueto family’s Costa Verde Aeronautica holding company set a shareholder meeting for Feb. 5 to discuss a capital increase aimed at buying into Pinera’s stake. Axxion will formally propose the sale the same day.

(Writing by Simon Gardner; Editing by Derek Caney)

((simon.gardner@thomsonreuters.com; Tel: +562-370-4250; Reuters Messaging: simon.gardner.reuters.com@reuters.net)) Keywords: CHILE AXXION/LAN

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