variglog at Stock Research

The Largest Brazilian air company Varig which is on the verge of bankruptcy, today has been sold on auction to former subsidiary - VarigLog. How absurd! The sum of the deal has made 500 million dollars. VarigLog was the unique participant of auction, Associated Press informs.
Initially the group of its employees applied for purchase of the company - TGV. The sum of their offer was below (449 million dollars). However court on affairs of bankruptcies has cancelled already planned and coordinated sale as group TGV did not manage to make the first payment at a rate of 75 million dollars. Company VarigLog (the former branch Varig) engaged transportations of cargoes, has been bought in 2006. Company Volo do Brasil. However this deal still should receive approval by authorities, as foreign investors supervise Volo. Under the law, foreigners can own only 20 % of the Brazilian airlines.
The court has declared that will not undertake actions on liquidation of the company while company’s creditors will not apply with the request for it.
Airline Varig has financial problems within several last years. Its duty makes 8 billion real (3.5 billion dollars). In June 2005 Varig became the first Brazilian company which has got under action of the new law on bankruptcies. Varig remains the largest international air carrier of Brazil though in a home market has conceded to the competitors - TAM and Gol. This is small wonder after financial problems during several YEARS!

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