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The airline explained the details of its financing process under the figure of debtor-in-possession (debtor-in-possession, or ‘DIP’).
As part of Avianca’s rescue plan which includes a loan from the Colombian government for US $ 370 million, The company indicated that the DIP financing will consist of two tranches that will total approximately US $ 1,200 million, for a total package of US $ 2 billion, “Including the financing of certain acquisitions and the refinancing of certain existing debts,” the company reported.
“We are pleased with the announcement of the Government of the Republic of Colombia about its participation in the company’s DIP financing and we express our gratitude for the trust and support that this loan shows, ”Avianca said.
The credit approved by the FOME is equivalent to approximately 30% of the total new resources or 20% of the total DIP financing. “We are pleased the positive reception that the DIP loan structure has received from external institutional investors. These institutional investors, together with current creditors of the company, are expected to represent the majority of the funds of Avianca’s DIP financing, ”the company said.
Outstanding: Avianca reactivates flights in Colombia, but cancels international flights for the first half of September
The airline trusts that the syndication process and the final documentation of the financing DIPs will be completed during the coming week, taking into account the substantial indications of interest from the private sector received to date.
“Once this step is completed, we will file the application for approval with the US Bankruptcy Court. that will establish our complete financing package under the DIP figure, which we hope will be approved by the Court during the month of September ”, he highlighted.
He DIP loan will be backed by a set of Avianca’s strategic assets as collateral (including Avianca’s participation in LifeMiles, its cargo subsidiary, its relevant brands and its cash accounts) and will include certain conditions precedent to be satisfied before being able to obtain the committed funds.
Highlight: Avianca will add three new funding agreements for US $ 1.2 billion
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