Brazil´s Varig Airlines to Be Sold

Creditors of Brazil´s embattled flagship airline Varig okayed a plan last week to auction off the company. The plan offers potential investors the right to buy all of Varig´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 of $860 million at an auction to be held within 60 days.

The buyer would form a new company, leaving most of the company´s towering debts, estimated at more than $3.9 billion, with the old company.

As a second option, Varig could auction off domestic routes for a minimum price of $700 million, again leaving the debt with the old company, which would also remain responsible for international operations.

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.