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Avianca formally presented an appeal for reconsideration and an appeal to the precautionary measure decreed by the Administrative Court of Cundinamarca that orders the suspension of the loan of up to US $ 370 million from the Government of Colombia.
According to Avianca, the appeal presented was based on five argumentative points.
The first of them has to do with the fact that the loan refers to favorable economic conditions for Colombia since the financing includes, among others, guarantees on assets that according to the airline (based on “objective valuations” of investment banks) they represent twice the funding.
This is added to the fact that the interest on the loan, of a minimum of 11% annualized, in dollars, plus commissions, “are significantly higher than the cost of sovereign funding in Colombia.”
Also read: Court in Colombia orders to suspend loan to Avianca
Second, Avianca says that the precautionary measure puts the company’s subsistence at risk, as well as the country’s air connectivity. “Avianca would stop receiving fresh resources and would suffer an even greater reduction in its liquidity levels, which would make its operation unviable,” says the firm on appeal.
Third, the Administrative Tribunal’s decision would represent, in the next five years, a loss of 123,000 jobs in Colombia per year; as well as a close hit to the $ 31 trillion of the national economy (3.19% of the national GDP).
In addition, tax collection would be seriously affected, according to the airline, since close to US $ 1.3 billion would not enter Colombia’s coffers in the same period.
Fourthly, “the closure of Avianca would seriously affect the public interest, since a good part of the economic reactivation of the country will be negatively impacted, with particular affectation for sectors as hit as tourism “, is read in the appeal.
Recommended: Government of Colombia will be priority over other Avianca lenders
Finally, Avianca believes that if it should stop operating in Colombia due to the lack of official financial support, it would be “impossible” for another airline to replace the connectivity and economic impact produced by the company.
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