Varig Creditors Approve Plan to Auction Off Embattled Airline

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Varig Creditors Approve Plan to Auction Off Embattled Airline
=20
A Varig creditor attends a meeting beside a banner at an aircraft hangar at=
 Santos Dumont Airport in Rio de Janeiro, Brazil, on Tuesday, May 9, 2006. =
Creditors meet to vote on offers to acquire the Porto Alegre, Brazil-based =
carrier, Brazil's biggest international carrier, Viacao Aerea Rio-Grandense=
 SA, Varig, that would allow it to avert shutdown and emerge from bankruptc=
y. (AP Photo/Silvia Izquierdo)

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RIO DE JANEIRO, Brazil May 9, 2006 (AP)=E2=80=94 Creditors of Brazil's emba=
ttled flagship airline Viacao Aerea Rio-Grandense SA on Tuesday approved a =
plan to auction off the company. The plan offers potential investors the ri=
ght to buy all of Varig's operations or just domestic operations, a Varig s=
pokeswoman said.=20
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 da=
ys, Danielle Faissal said by telephone.=20
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.=20
As a second option, Varig could auction off domestic routes for a minimum p=
rice of $700 million, again leaving the debt with the old company, which wo=
uld also remain responsible for international operations.=20
Varig has been in trouble for some years.=20
The airline recently had to ground planes and cancel flights because it cou=
ldn't meet operating payments, and government airport authorities and fuel =
suppliers had threatened to stop domestic flights because of outstanding bi=
lls.
Copyright 2006 The Associated Press. All rights reserved. This material may=
 not be published, broadcast, rewritten, or redistributed.
=20
Roger & Amanda La France 

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