Vargas is set to join Gremio on-loan.
"First they wanted 1.5m for an 18-month loan and we accepted. Then they wanted the same amount for a 12-month deal.
"Then they came back to us and asked to insert a clause which would allow them to recall him at any moment.
"I said I would only accept that if they then gave us back our money should they opt to recall him. That's when the deal collapsed."