Auction of Brazilian air carrier Varig brought forward to June 5

30 May 2006

Rio de Janeiro, Brazil, 30 May – the auction for the sale of Brazilian air carrier Varig has been brought forward from June 9 to June 5, due to a court decision announced in Rio de Janeiro.

The auction was brought forward because Brazilian economic and cooperation bank, Banco Nacional de Desenvolvimento Econômico e Social, did not approve any of the proposals put forward by three institutions that want to act as intermediaries for a bridging loan to capitalize Varig before June 9.

The official edict for the company’s sale is due to be published Wednesday in Brazil’s official law publication, Diário Oficial do Poder Judiciário.

Varig may be sold as a single unit – all national and international air transport interests – or separately – just its domestic operations. Minimum prices have been set at US$860 million and US$700 million, respectively.

The two sale models exclude the company’s debts, which are estimated at US$4 billion and which will remain the responsibility of a separate company.

If there are no interested parties for the auction, or if none of the proposals reaches the minimum value, a second auction will be held on the same day.

According to the edict, only Brazilian companies headquartered in and managed from the country may take part. (macauhub)