Varig Shares Tumble as Brazil Airline Auction Lures One Bid
June 8 (Bloomberg) — Shares of Viacao Aerea Rio-Grandense SA, Brazil’s biggest international carrier, tumbled 32 percent after an auction for the bankrupt company’s assets attracted a single bid from an employee-led group.
Varig, in bankruptcy protection for almost a year, received a $449 million offer from NV Participacoes. The carrier failed to attract bids from any outside investors, including other Brazilian airlines. A bankruptcy judge must approve the sale.
`In the end there’s more uncertainty surrounding the entire process,’ Eduardo Pozziello, aerospace analyst at Fator Corretora SA, Brazil’s largest brokerage. Varig shares fell 50 centavos, or 32 percent, to 2.45 reais at 11:59 a.m. New York time in Sao Paulo trading.
The carrier, with 7 billion reais ($3.1 billion) of debt, had sought to raise $860 million with the sale of its operating assets. The government, one of Varig’s biggest creditors, said the buyer wouldn’t be liable for the airline’s unpaid taxes.
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