A Brazilian judge has given the greenlight for the sale of bankrupt Varig to an employee group, staving off the immediate threat of the company’s liquidation, local media has reported.
Judge Luiz Roberto Ayoub approved the $444 million bid made at a June 8 auction by Varig employee group NV Participacoes (TGV).
However, the bid was well below the original asking price of $860 million.
Ayoub had delayed approval of the bid due to questions over the structuring of the deal and TGV’s solvency.
“We understand that clarifications were given and financial guarantees presented,” Judge Luiz Roberto Ayoub told reporters.
The judge said that the workers’ group would have to deposit $75 million by Friday to confirm the sale, otherwise the airline will be auctioned again.
Varig has been canceling around 20 flights daily as the bankruptcy proceedings drag on.
However, the airline has said the cancelations are due to bad weather and regular plane maintenance.