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:

Ads

You May Also Like

Brazil's Education Minister Tarso Genro

Brazil’s 2010 Presidential Campaign Has Started and Tarso Genro Is Ahead

Sunday, October 29, 10.55 pm in Brasília: Luiz Inácio Lula da Silva is re-elected ...

Over 80% of Brazilians Are Living in Cities

Brazil has the world’s fifth largest population, but in terms of population density, the ...

Brazil Police Stage Monster Operation and Nab over 2,000 Crooks in a Day

The Civilian police in Brazil, in a raid that counted on more than 9,000 ...

Los Angeles Gets a Day on the Park to Celebrate Brazil’s Culture

For the fourth year in a row, the Consulate General of Brazil in Los ...

Brazil Embraer’s Profits Fall Sharply, But Order Backlog Hits All-Time High

Brazilian aircraft maker Embraer had net revenues of US$ 894.1 million in the third ...

Forest Burning Is Brazil’s Contribution to Greenhouse Effect

“Brazil’s chief contribution to increasing the greenhouse effect certainly comes from the burnings,” affirmed ...

In Brazil, the Rich Inherited Earth and Water

The president of Brazil’s National Confederation of Agricultural Workers (Contag), Manoel dos Santos, declared that water ...

International Executives Debate Brazil’s Bottlenecks and Crumbling Roads

Executives from several multinationals in Brazil will meet to discuss the shortcomings of Brazil’s ...

Brazil Sends Murderer of American Missionary Back to Prison

American missionary Sister Dorothy Stang, who worked with poor people, often landless farmers, in ...

Brazil’s Left Parties Are Old and Bureaucratized, Warns MST’s Leader

“It is time for the government to ally with the people or pay the ...