TAP Brings Half a Billion Dollars to Save Brazil’s Ailing Varig Airlines

Fernando Pinto, president of the Portuguese airline, TAP, reiterated Tuesday, November 8, his company’s intention to invest US$ 500 million on the reorganization of Varig.

He said that part of the funds would come from investors who are TAP’s business partners in Europe and the rest would come from the company itself.

Pinto and the president of the National Economic and Social Development Bank (BNDES), Guido Mantega, signed a loan contract for US$ 42 million, two-thirds of the total amount (US$ 62 million) to be invested in the first phase of the recovery of the Brazilian airline.

TAP used the BNDES loan to buy 95% of the shares of the VarigLog cargo transport company and 90% of the shares of Varig Engineering and Maintenance (VEM).

Varig will use the money to repay a debt to US firms from which it leased 40 airplanes. The airplanes were to be seized under a US court order, if the debt were not repaid by Wednesday, November 9.

"With this operation, Varig obtains breathing room for the coming phases. Besides these short-term resources, TAP will cover US$ 40 million in receivables, so that Varig can pay off part of what it owes its employees, as well as putting planes back into the air to generate revenues," Pinto added.

Varig has approximately 11,500 employees and a fleet of 78 aircraft, of which 15 are out of service. The company’s overall debt to government and private creditors stands at around US$ 3.18 billion (R$ 7 billion).

Agência Brasil

Tags:

You May Also Like

Brazil’s GDP Grows 4.2% in First Half

Brazil’s first semester GDP growth closed out up 4.2%, compared to the first half in ...

Brazilians Arrested in US for Counterfeiting

Three Brazilian nationals were arrested today on charges they were producing fraudulent immigration and ...

Brazil Opens Its Franchises to the US

The Brazil Pavilion will be one of the main highlights of the 14th IFE ...

Rescuers Try to Save Whale Who Swam 560 Miles Up Brazil’s Amazon River

A team of biologists and veterinarians from the Ibama (Brazilian Institute of Environment and ...

Lula Wins, Brazil’s Senate Committee Says Yes to Venezuela in Mercosur

Brazil's Senate Foreign Relations Committee gave its green light this Thursday, October 25, to ...

Brazil and Venezuela Sign Oil Agreement

Petrobras (Brazilian Petroleum S.A.) and PDVSA (Venezuelan Petroleum S.A.) will sign a protocol of ...

Brazilian Model Ana Carolina Reston

Anorexia Kills Brazilian Model Ana Carolina, 21, 5.7 ft, 88 lbs

"Far or close to me, I am still in love with you, pretty little ...

Where are the Brazilians?

"We had a dream of bringing music here, having a Carnaval. But lots of ...

Brazil Under Siege by Criminal Gang: 77 Killed, 61 Buses Set on Fire

Since late Friday night, May 12, the state of São Paulo, Brazil’s richest and ...

Not Oil But Knowledge Is the Resource that Can Save Brazil

Only two letters separate “pre-salt” from “pre-school,” but between these two options is an ...