Brazil’s Varig Bought for US$ 24 Million. 8000 Employees Get the Ax.

It seems that the name Varig will survive after all. The moribund airline company which once was a symbol and pride of Brazil was spared bankruptcy at the eleventh hour being bought today, July 20, by its former subsidiary VarigLog for the price of US$ 24 million.

São Paulo- based VarigLog was the only interested in the auction held in Rio de Janeiro. While the name Varig may be preserved, very little will be left of the old company starting with the 10,000 employees, which should be reduced to a maximum of 2000. And the fleet which had 80 planes just 6 months ago, will be cut to 13 aircraft.

VarigLog paid the minimum price established by the auction, but it will assume several debts and commitments left by the old Varig, like US$ 112 million in previously bought tickets and US$ 32 million from the frequent-flyer program Smiles. The new company inherits the name and all the international and domestic routes that belonged to Varig and Rio Sul.

The buyer has also promised to invest US$ 150 million in 30 days and to issue debentures in the value of US$ 46 million which might be converted in stocks in the new company.

About 1,000 Varig employees who were present at the auction were ecstatic. They applauded noisily when the sale was announced. The judge who dealt with the bankruptcy all these months, Luiz Roberto Ayoub, was cheered and received with signs that said: "Ayoub 100% Justice."

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Your email address will not be published.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 to Tell US: Our Sanitation Has Improved

This week Brazil and the United States will return to the negotiating table for ...

Mercosur Intent on Eradicating Foot and Mouth Disease

The Brazilian Minister of Agriculture, Livestock, and Supply, Roberto Rodrigues, emphasized the mutual effort ...

Brazil and Vatican Clash on Condom and Singer Daniela Mercury

The Vatican recently announced it would not permit Brazilian pop singer, Daniela Mercury, to ...

Snubbed as “Diplomatic Dwarf” Brazil Calls Israeli Spokesman the Assistant of the Assistant of the…

The special adviser for international affairs to the Brazilian presidency, Marco Aurelio Garcia, called ...

Brazilian Market Quiet in Anticipation of Central Bank’s Move

Latin American markets were mixed on the session, as a late-day rally in U.S. ...

Brazil to Get a US$ 33 Billion Trade Surplus This Year

Brazil’s cumulative trade surplus for the year to the first week in November is ...

Striking Teachers Confront Brazil’s National Soccer Team With Chants of There Will Be no Cup

Brazil’s national soccer team was forced to avoid a group of 200 striking teachers ...

A Brazilian Model to Curb Violence

A law ordering bars to be closed from 11 p.m. to 6 a.m. was ...

Brazil President Wants Oil Money to Fight Poverty and Improve Education

Brazil's President, Luiz Inácio Lula da Silva, used event in Vitória, capital of the ...

28 Castrated Boys Will Receive US$ 219 a Month from Brazilian Government

The families of boys castrated in Maranhão, in northeastern Brazil, will each receive a ...