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Colombian airline Avianca expects to exit bankruptcy this year, raising new equity

Credit: REUTERS/LUISA GONZALEZ

Colombian airline Avianca Holdings, which filed for bankruptcy early in the pandemic, said on Wednesday it expects to exit Chapter 11 bankruptcy this year, and that it will refinance some of its debt into equity.

Adds details on bankruptcy process

SAO PAULO, April 14 (Reuters) - Colombian airline Avianca Holdings AVT_p.CN, which filed for bankruptcy early in the pandemic, said on Wednesday it expects to exit Chapter 11 bankruptcy this year, and that it will refinance some of its debt into equity.

Avianca, along with rival Chile's LATAM Airlines LTM.SN, were the two largest carriers in the region before the pandemic, but they were both sent into bankruptcy restructuring when the virus upended air travel, with restrictions that were especially harsh in Latin America.

Avianca was already dragging several years of losses before the pandemic began, and went through a boardroom coup in 2019 led by United Airlines UAL.N, which has already written down its investment in Avianca.

During the bankruptcy process, Avianca received over $2 billion in new financing, which it said on Wednesday it would refinance.

Under its plan, Avianca would convert $900 million of that debt into equity, and raise new funds to replace the remaining debt, which would include new equity.

The goal, Avianca said, is to have $1 billion in available liquidity upon exiting Chapter 11.

(Reporting by Marcelo Rochabrun Editing by Bernadette Baum)

((marcelo.rochabrun@thomsonreuters.com; +55 11 5644 7768;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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