A Rio de Janeiro business court has accepted the sale of Brazil’s biggest but deeply troubled carrier, Varig.
The presiding judge in the case, Luiz Roberto Ayoub, declared that "… with the judicial acceptance of the result of the June 8 auction, NV Participações (representing Varig employees) is the owner of the company (Varig Operacional)."
However, the buyers must make an initial deposit of US$ 75 million (172.5 million reais) within 72 hours.
At the June 8 auction, the only one bid made was by NV Participações which offered R$ 1.01 billion for Varig (less than half a million dollars).
Ayoub warns that if the mandatory deposit of US$ 75 million is not made by NV Participações the June 8 auction will be considered void.
"If the mandatory deposit is made, the problem is taken care of. I believe that is what will happen. I certainly hope so," declared the judge.
Ayoub explained that he examined the NV Participações bid carefully. Part of the group’s R$ 1.01 billion offer was in debentures. The judge said he was satisfied that the offer was sound, but he added that if the mandatory deposit was not made the bidder in default will not be eligible to participate in any further auctions.
The new owners of Varig will also have to inform the judge of the Bankruptcy Court of New York, Robert Drain, of the Brazilian court decision. Drain has issued an injunction protecting Varig aircraft from arrest until tomorrow, June 21.