RIO DE JANEIRO, Brazil_Creditors of Brazil's embattled flagship airline flagship airline Viacao Aerea Rio-Grandense SA on Tuesday approved a plan to auction off the company, offering potential investors the right to buy all of the company's operations or just domestic operations, a Varig spokeswoman said.
Creditors and government officials agreed to try to sell Varig's routes and planes for a minimum price of US$860 million (€677.33 million) at an auction to be held within 60 days, Danielle Faissal said by telephone.
The buyer would form a new company, leaving most of the company's towering debts, estimated at over US$3.9 billion (€3.07 billion) with the old company.
As a second option, Varig could auction off domestic routes for a minimum price of US$700 million (€551.31 million), again leaving the company's debts with the old company, which would also remain responsible for international operations.
Varig has been in trouble for some years. The airline recently had to ground planes and cancel flights because it couldn't meet operating payments, and government airport authorities and fuel suppliers had threatened to stop domestic flights because of outstanding bills.
