Colombian Airline Avianca announced on Monday that it has received approval from the U.S. Court of Bankruptcy to access its debtor-in-possession (DIP) financing totaling just over $2 billion.
The Latin America’s second-largest airline entered a restructuring process under Chapter 11 U.S bankruptcy laws amid the COVID-19 pandemic. As LABS has shown, without government aid, Latin American airlines will take longer to recover.
Last month the Colombian court ordered a $370 million loan to Avianca temporarily withheld until the company presented sufficient guarantees it will be able to repay the loan.
On a press statement, Adrian Neuhauser, Chief Financial Officer of Avianca said that “the approval of the DIP financing package is a significant milestone and an important step forward for Avianca. We would like to again thank our lenders for their support and confidence in Avianca’s future success. We continue to work on our go-forward operating plan in order to emerge from this process as a stronger and more efficient airline, and look forward to presenting our plan to the U.S Court as we move forward in the Chapter 11 process.”
Anko van der Werff, president and CEO of Avianca, stated: “As COVID restrictions begin to ease, we are pleased to have safely resumed passenger flights to 21 cities in Colombia and 14 international destinations and look forward to adding more destinations to meet our customers’ travel needs over the coming months. We thank our customers for their loyalty, and we remain steadfast in our commitment to connecting people, families, and businesses across Latin America through the Chapter 11 process and beyond.”
Seabury Securities is serving as Avianca’s investment bank and financial advisor. Goldman Sachs Lending Partners and JPMorgan Chase Bank are serving as co-lead arrangers and joint bookrunners of the Tranche A DIP Loans. Milbank is serving as Avianca’s legal advisor.