Brazil’s Bankrupt Varig Is Sold, But Airline Is Not Out of the Wood Yet.

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.

Agência Brasil

Tags:

  • Show Comments (0)

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Brazil’s Petrobras Wax Poetic on Bolivian Sovereignty

Petrobras released Thursday morning, May 11, an official note from the Brazilian Ministry of ...

Brazil Needs to Be Cured from Its Acute Televisitis

As always, the intentions could not have been better: the movement against media concentration ...

Home Stretch

Wishful thinking as Cardoso looks ahead to last year of his mandate. The President ...

Sí£o Paulo (10.9 Million), Rio (6.1) and Salvador (2.9) Brazil’s Biggest Cities

Brazil currently has 189.6 million inhabitants distributed across 5,565 cities and the capital of ...

Brazil’s Exchange Flow in the Red by Over US$ 2 Billion This Month

The total of dollar inflow and outflow in Brazil was negative at US$ 2.163 ...

Out of Asia Brazil Becomes World’s Top Rice Consumer and Producer

Brazilian exports of rice from March to August totaled 560,000 tons. The result is ...

Brazilian Congress Inquiry on Veja Magazine Believed to Be Reprisal

The Inter American Press Association (IAPA) announced that it plans to keep a close ...

Brazil Never Saw Such Promising Economy, Says Lula

Brazilian President Luiz Inácio Lula da Silva praised the government’s economic policy. In a ...

Brazil Will Have By 2013 World’s First Seaweed Biofuel Plant: a US$ 10 Million Project

The first industrial plant in the world capable of getting biofuels from seaweed should ...

Cannibalistic Dinners

But how could you put up with this? I suddenly asked, with a human ...