Midnight Mike
2006-05-26, 09:16 PM
SAO PAULO, Brazil_Brazil's debt-ridden airline Viacao Aerea Rio-Grandense, or Varig, said Thursday that leasing company Bristol Associates had seized a Varig jet at JFK Airport in New York due to non-payment.
The plane, a Boeing 777, had been idle for 43 days awaiting maintenance and won't immediately be missed, a Varig spokesman said.
"Varig had not been officially notified of the repossession. Representatives of the leasing firm seized the plane on Wednesday after presenting themselves to authorities as the owner of the aircraft," the spokesman said.
Varig has struggling for several years with rising debts totaling more than US$3.06 billion (?2.6 billion). The company sought bankruptcy protection in July 2005.
The airline recently had to ground planes and cancel flights because it couldn't meet operating payments, such as airport fees and fuel bills.
Several leasing firms have tried to reclaim planes because of non-payment through the New York courts, and other leasing firms are expected to do so in coming days.
So far, the New York bankruptcy court judging the case has not authorized repossession in order to allow Varig time to restructure.
Varig administrators plan to try to sell off the airline's operations at an auction on July 1.
Under the terms of the auction, Varig's domestic and international operating assets will be put up for sale for a minimum price of US$860 million (?671.7 million). The commercial wing of the company won't be sold and will be left with the company's debts.
Alternatively, the company's domestic assets could be sold, with a minimum price of $700 million (? 546.75 million).
<<Associated Press WorldStream -- 05/26/06>>
The plane, a Boeing 777, had been idle for 43 days awaiting maintenance and won't immediately be missed, a Varig spokesman said.
"Varig had not been officially notified of the repossession. Representatives of the leasing firm seized the plane on Wednesday after presenting themselves to authorities as the owner of the aircraft," the spokesman said.
Varig has struggling for several years with rising debts totaling more than US$3.06 billion (?2.6 billion). The company sought bankruptcy protection in July 2005.
The airline recently had to ground planes and cancel flights because it couldn't meet operating payments, such as airport fees and fuel bills.
Several leasing firms have tried to reclaim planes because of non-payment through the New York courts, and other leasing firms are expected to do so in coming days.
So far, the New York bankruptcy court judging the case has not authorized repossession in order to allow Varig time to restructure.
Varig administrators plan to try to sell off the airline's operations at an auction on July 1.
Under the terms of the auction, Varig's domestic and international operating assets will be put up for sale for a minimum price of US$860 million (?671.7 million). The commercial wing of the company won't be sold and will be left with the company's debts.
Alternatively, the company's domestic assets could be sold, with a minimum price of $700 million (? 546.75 million).
<<Associated Press WorldStream -- 05/26/06>>