A Brazilian court on Friday canceled the sale of bankrupt airline Varig to an employees group after it failed to make a deposit on time, and delayed a decision on the carrier's fate until next week.
The sale to NV Participacoes, a consortium of Varig employees and unidentified investors, "was invalid because of the failure to pay" a US$75 million deposit, the court of Rio de Janeiro announced in a statement.
"The future of Varig will be resolved next week," it said.
PHOTO: AP
The court outlined its three options: organize a new auction, call for a meeting of creditors or declare the liquidation of the airline at the request of some creditors.
The announcement came minutes after NV Participacoes said it could not pay the deposit.
"We have not made the deposit. We have not been able to reach an agreement with the investors so that they deposit the money," said Marcio Marsillac, an official of NV Participacoes, which made a US$449 million offer to buy the heavily indebted airline. "We don't know what will happen. It is up to the judge to decide now."
Bankruptcy judge Luiz Roberto Ayoub is overseeing the company which has been operating under bankruptcy protection since June last year.
Ayoub confirmed Friday news reports of another takeover offer for Varig, from Varig Log, the carrier's former freight subsidiary which was sold in 2005 to the consortium Volo Brasil, grouping US investment fund Matlin Patterson and Brazilian investors.
Varig Log reportedly offered some US$500 million for Varig -- US$100 million more than it offered two months ago.
Like the two previous days, about two-thirds of Varig's flights were cancelled on Friday, leaving thousands of passengers stranded in airports in Brazil and abroad.
It was in danger of running out of jet fuel for lack of payment. Infraero, the state airports authority, threatened to demand cash for its unpaid airport taxes.
The former leading Brazilian airline can no longer pay its suppliers or its 10,600 employees.
The cash-strapped airline is saddled with more than US$3 billion in debt and deteriorating rapidly. It only has 19 planes in operation compared with 46 in early June.
The National Civil Aviation Agency has launched an emergency plan to deal with the crisis: 28,000 passengers holding Varig tickets are supposed to return to Brazil between now and June 30, including 5,600 attending the World Cup in Germany.
The agency claims to have found seats for the passengers on other airlines, but late Thursday dozens of Brazilians stranded in New York were still waiting for a flight home.
Two army aircraft will repatriate Brazilians if necessary, the agency said.
Once Brazil's indisputable leading airline, Varig's fortunes began to decline in the 1990s after it lost its monopoly on international routes. The last time Varig turned a profit was in 1995.
On Tuesday, US President Donald Trump weighed in on a pressing national issue: The rebranding of a restaurant chain. Last week, Cracker Barrel, a Tennessee company whose nationwide locations lean heavily on a cozy, old-timey aesthetic — “rocking chairs on the porch, a warm fire in the hearth, peg games on the table” — announced it was updating its logo. Uncle Herschel, the man who once appeared next to the letters with a barrel, was gone. It sparked ire on the right, with Donald Trump Jr leading a charge against the rebranding: “WTF is wrong with Cracker Barrel?!” Later, Trump Sr weighed
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) secured a record 70.2 percent share of the global foundry business in the second quarter, up from 67.6 percent the previous quarter, and continued widening its lead over second-placed Samsung Electronics Co, TrendForce Corp (集邦科技) said on Monday. TSMC posted US$30.24 billion in sales in the April-to-June period, up 18.5 percent from the previous quarter, driven by major smartphone customers entering their ramp-up cycle and robust demand for artificial intelligence chips, laptops and PCs, which boosted wafer shipments and average selling prices, TrendForce said in a report. Samsung’s sales also grew in the second quarter, up
HEADWINDS: Upfront investment is unavoidable in the merger, but cost savings would materialize over time, TS Financial Holding Co president Welch Lin said TS Financial Holding Co (台新新光金控) said it would take about two years before the benefits of its merger with Shin Kong Financial Holding Co (新光金控) become evident, as the group prioritizes the consolidation of its major subsidiaries. “The group’s priority is to complete the consolidation of different subsidiaries,” Welch Lin (林維俊), president of the nation’s fourth-largest financial conglomerate by assets, told reporters during its first earnings briefing since the merger took effect on July 24. The asset management units are scheduled to merge in November, followed by life insurance in January next year and securities operations in April, Lin said. Banking integration,
LOOPHOLES: The move is to end a break that was aiding foreign producers without any similar benefit for US manufacturers, the US Department of Commerce said US President Donald Trump’s administration would make it harder for Samsung Electronics Co and SK Hynix Inc to ship critical equipment to their chipmaking operations in China, dealing a potential blow to the companies’ production in the world’s largest semiconductor market. The US Department of Commerce in a notice published on Friday said that it was revoking waivers for Samsung and SK Hynix to use US technologies in their Chinese operations. The companies had been operating in China under regulations that allow them to import chipmaking equipment without applying for a new license each time. The move would revise what is known
RSS