Last heard the Brazilian Govt was keen on helping them.

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MEL

Reuters

New bidder for bankrupt airline Varig makes deposit

RIO DE JANEIRO, June 26, 2006 

A US-Brazilian consortium has offered 495 million dollars to buy bankrupt Brazilian airline Varig, a court official said Monday, raising hopes dashed last week by the failure of another bid.

Volo do Brasil, grouping US investment fund Matlin Patterson and Brazilian investors, came back with the 495-million-dollar offer after its bid of 400 million dollars two months ago was rejected as too low.

‘‘Volo already deposited 20 million dollars and (bankruptcy) Judge Luiz Roberto Ayoub is now going to study its offer of 495 million dollars,’’ a spokesman for the Rio de Janeiro court told AFP.

‘‘The judge will issue a statement tonight’’ on the validity of the offer, he said.

Volo do Brasil bought Varig’s freight subsidiary VarigLog in December 2005.

Its offer of 400 million dollars for Varig in April was rejected by the airline’s creditors.

Shares in Varig soared 44 percent on the news of the 20-million-dollar deposit, to 2.18 reales (0.98 dollars) on the Sao Paulo stock market.

Since last week the airline has been on the edge of collapse, paralyzed by a cash crunch that has forced it to cancel 70 percent of its domestic and international flights.

On Monday morning, 21 flights had been cancelled at the Rio international airport and 26 at the Sao Paulo airport.

Varig is saddled with more than three billion dollars in debt and has only 20 planes -- down from 70 a year ago, some 10,600 unpaid employees and tens of thousands of passengers stranded in airports around the world.

An auction of Varig on June 8 resulted in one offer, for 449 million dollars, being accepted by Ayoub.

But a Brazilian court Friday canceled the sale to NV Participacoes, a consortium of Varig employees and unidentified investors, after it failed to make a deposit on time of 75 million dollars to ensure the carrier’s short-term operations.

Ayoub had insisted that Varig should be auctioned again. ‘‘There cannot be a direct sale, only a competition,’’ he said.

VarigLog wants to buy the airline debt-free and insists it has the financial means to keep the carrier flying and proceed with its restructuring. According to the specialized press, its offer includes a provision for Varig employees to own five percent of the shares and creditors to own five percent.

The National Civil Aviation Agency over the weekend approved Volo’s acquisition of VarigLog, which according to the press would eliminate a key hurdle in its bid for Varig.

Tourism Minister Wilfredo Mares Guia proposed Saturday a relaxation of the aeronautics code so that foreign investors can own more than 20 percent of the capital of Brazilian airlines, if that would save Varig from liquidation.

Once Brazil’s indisputable leading airline, Varig’s fortunes began to decline in the 1990s after it lost its monopoly on international routes. The last time Varig turned a profit was in 1995.

Varig still controls 60 percent of flights outside of Brazil, flying passengers to a total of 21 foreign destinations. But rivals Tam and Gol have now left Varig with only 16 percent of the domestic market.

No way! If Germany loses, LH would probably fly the winning team right into the Atlantic ocean

the_380 wrote:

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Who will fly the brazilian football team home LH probably

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Pictures by Gianfranco Beting of JetSite.

The link to this discussion on a-net is here

http://www2.airliners.net/discussions/general_aviation/read.main/2871710/

What a mess!

Some appear to be cannibalised also.

Brazilian pilots are here in a flood, but not necessarily from Varig!!!!

Spoke with some Brazilian Pilot Friends at our Airline.The Situation is bad & there are a Lot of Unemployed as all could not be Absorbed by the other carriers.

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MEL

I'm Surprised the Brazilian Govt wont help them.

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MEL