The judge overseeing the process aimed at saving beleaguered Brazilian airline Varig told EFE news wire on Monday that he will give the employee group seeking to buy the carrier 48 hours to demonstrate their financing is solid. “It’s not approved,” Rio de Janeiro magistrate Luiz Roberto Ayoub said Monday of the $450 million bid from NV Participacoes. “It is subject to conditions. If those conditions are met, the authorization will be definitive.”
His main concern, he said, is determining whether NV’s proposal to issue new commercial paper is sound.
“If they convince me that by way of that currency (the bonds) there will be sufficient liquidity for meeting the obligations, I don’t see an impediment” to the deal, the judge said.
NV Participacoes represents Varig pilots, flight attendants and mechanics affiliated with the TGV, created in 2003 in opposition to the SNA aviation union. NV’s bid for the airline consists of only about $126 million, with another $100 million consisting of the carrier’s pending obligations to its roughly 11,000 employees and $223 million expected from the sale of new bonds.
“We will do what’s possible to save this enterprise,” Ayoub said Monday.
Varig, which operates almost 70 percent of the international flights departing from Brazil and 16 percent of domestic traffic, has roughly $3 billion in debt and faces the imminent prospect that some of its aircraft will be repossessed.