The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
Avianca Holdings SA won court approval to send its reorganisation plan to creditors for a vote, bringing the Colombian air
carrier one step closer to exiting bankruptcy under new ownership. Lenders and noteholders who agreed to refinance their debt at the beginning of Avianca’s bankruptcy case last year will get 72% of the airline’s equity in exchange for canceling about $934.7 million, according to court papers.
US Bankruptcy Judge Martin Glenn said he would approve a disclosure statement that will be sent to creditors in the US and Colombia that they can use to decide whether to support the debt restructuring plan. Under the proposal, the company will eliminate about $3 billion in debt, the company said.
Avianca was Latin America’s second-largest airline before the Covid-19 pandemic slowed air travel to a trickle last year, leading it to file for Chapter 11 protection in a New York court in May of 2020. Latam Airlines Group SA and Mexico’s Grupo Aeromexico SAB also were forced into bankruptcy as the region suffered one of the world’s sharpest drops in flights.
Avianca will return to court in October, when Glenn will consider the voting results in deciding whether to approve the restructuring plan.