Varig receives new proposal

14/04/2006 - 11h30

Alana Gandra
Reporter - Agência Brasil

Rio - The management of Varig, the Brazilian flagship air carrier that is having serious financial problems, has recommended that the company's administrative council accept a new proposal by Varig Logística (Varig Log). Varig Logistica, a former subsidiary of Varig, is now owned by Volo do Brasil, a consortium consisting of US investment firm Matlin Patterson and three Brazilian firms.

Varig Logistica had previously offered to spend up to US$350 million on Varig. The latest proposal is to raise that to US$400 million.

If the offer is accepted by the administrative council, it will have to be accepted by the company's creditors. In a note explaining the decision to accept the Varig Logistica offer, Varig said it "...continues to seek a viable market solution that will make recovery possible."

Translation: Allen Bennett