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News 10/05/2006   

Varig on the block
BYLINE
 
Bankrupt Brazilian flagship carrier Varig is to be auctioned off to the highest bidder.

The airline's creditors will first create a new debt-free company, Varig Operacoes, which will own international and domestic routes and aircraft. Most of Varig's USD3.9 billion worth of debts will be left with Varig Commercial, a company established to market Varig Operacoes services.

Creditors plan to auction Varig Operacoes within the next 60 days for a minimum of USD860 million.

If the minimum bid is not met, Varig's domestic operation will be sold as a separate entity for a minimum of USD700 million, leaving the debt with a new company formed to control the airline's international services.

10 May 2006


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