VARIG HAS BEEN SOLD!
RIO DE JANEIRO, Brazil, July 20 (Reuters) - Brazilian investment fund Volo do Brasil was the sole bidder on Thursday at a public auction to sell airline Varig (VAGV4.SA: Quote, Profile, Research), winning the troubled carrier for 52.4 million reais ($24 million).
The sale foresees splitting Varig into two companies. Volo, which together with U.S. investment fund MatlinPatterson controls cargo unit VarigLog, will get most of Varig's routes, as well as the bulk of its fleet, which has dwindled to 13 aircraft from 60 a few months ago.
It will not, however, inherit Varig's crushing debt load of more than 7 billion reais ($3.1 billion). That will have to be paid back by a separate company in charge of Varig's training center and other company buildings, as well as one domestic route.
Varig, once Latin America's largest airline, has been operating under bankruptcy protection for the past year. ($1 = 2.19 reais)