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Company Watch - Varig.

For more company news, data and analysis, please go to: http://www.airguideonline.com/professional.htm Jun 19, 2006

In Brazil, rumors grew earlier this week that three additional groups had interest in bidding for Varig. Some of those appeared confirmed yesterday, as Bloomberg reported that TAP Portugal and Air Canada, two of Varig's Star Alliance partners, might enter the fray along with Brookfield Asset Management, according to TAP CEO Fernando Pinto, who was in Rio de Janeiro. Investment groups Syn Logistica and Fontidec also have bid for Varig, Bloomberg said. Brazilian aviation authorities have a contingency plan in place in case the airline stops flying, including orchestrating the return of thousands of Brazilians who traveled to Germany for the World Cup. Jun 16, 2006

Varig and the group of employees and unidentified investors who bid for the carrier, NV Participacoes, were granted another extension by Rio de Janeiro bankruptcy court Judge Luiz Roberto Ayoub, who had given the group until Wednesday to make a case for its BRL1.01 billion ($439 million) bid. The court now will reconsider the bid next week, giving it time to examine documents NVP delivered just half an hour before the Wednesday deadline and the opportunity to consider other offers. NVP proposed to pay BRL285 million cash, BRL225 million on workers' credit and BRL $500 million on debentures and future profits. Jun 16, 2006

Varig representatives said yesterday at a hearing in New York that a second, unidentified investor offered $450 million in cash for the airline, a figure higher than the bid offered last week by a group of employees that included just $125 million in cash, Bloomberg News reported. The employees' bid was approved in principle yesterday by a Rio de Janeiro bankruptcy court judge, who asked the group to double its cash commitment before he issues a final ruling today. A Varig attorney called the potential new bidder a "Brazilian airline industry investor," Bloomberg said. Meanwhile, Varig's request for an extension to an injunction blocking the seizure of approximately 30 leased aircraft was granted in New York, giving the airline until June 21, Reuters reported. Jun 14, 2006

Varig alive for now as employee bid approved in principle. A Brazilian bankruptcy court judge granted Varig a glimmer of hope yesterday, approving an employee group's BRL1.01 billion ($445.5 million) offer for the beleaguered airline with certain conditions.NV Participacoes (TGV), composed of pilots and flight attendants, presented the only bid at last week's auction, one that fell well below the minimum. TGV offered $125 million in cash and intends to pay off the remainder with the debentures and claims against the carrier for unpaid wages and other benefits. The bid is backed by four unidentified investors, Bloomberg News reported, but Ayoub told the group yesterday that additional investors would be allowed. TGV reportedly wanted to finance some of the purchase with future profit-sharing, but Ayoub disallowed that part of the proposal. If he approves the deal, TGV will have three days to make a $75 million cash payment. Varig said in filing to the US Bankruptcy Court in New York submitted prior to the Rio ruling that TGV would have to increase its cash offer to $346 million to satisfy the Brazilian court, according to Bloomberg. Varig also asked the New York court to extend an injunction, set to expire today, protecting its aircraft from seizure. Jun 13, 2006

Brazilian bankruptcy court postponed its Friday decision on whether to allow a group of Varig employees, NV Participacoes, to buy the bankrupt airline for a bid that came in at about half the $860 million minimum at last week's auction. The judge opted to delay his ruling until today in order to learn more about the bid, according to a court statement cited by press reports. Unions not involved in the bid have asked the government to take over the airline but the Brazilian Defense Minister said that will not happen, Bloomberg News reported. Jun 12, 2006
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Publication:Airguide Online
Geographic Code:1CANA
Date:Jun 19, 2006
Words:666
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