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José González Bell – [email protected]
The Bankruptcy Court of the United States approved Avianca’s DIP financing plan for US $ 2 billion, resources that will allow it to face the financial impacts, effects of the cessation of operations for more than five months due to covid-19.
Around 30 lenders hope to participate in the process and with the money the company seeks to have liquidity levels above US $ 400 million during the time it is in Chapter 11.
Now, to give lenders security, the airline gave them seven guarantees: participation in the LifeMiles loyalty program; the cargo business; credit card accounts receivable; brands and intellectual property of brands; cargo aircraft and propulsion assets; residual interest on certain aircraft and cash accounts.
The value of these elements is between US $ 2.53 billion and US $ 4.210 million, according to the presentation to lenders.
The first and most important guarantee is the 89.9% participation in the LifeMiles loyalty program, as well as the option to acquire an additional 10.1%. The program’s valuation is between US $ 1.6 billion and US $ 2.6 billion.
Meanwhile, the brands and their intellectual property, as well as some aircraft and propulsion assets and residual interests in some aircraft, have an estimated value of US $ 250 million.
The cargo business is an estimated guarantee of between US $ 600 million and US $ 920 million, while the cash accounts and credit cards are equivalent to US $ 440 million.
Anko van der Werff, president and CEO of Avianca Holdings, stated that “with the approval of the US Court of the DIP financing, Avianca increases its financial liquidity, supporting our operations while we continue to fly and serve our clients. ”.
According to what John E. Luth, CEO of Seabury International Corporate Finance, told Bloomberg, Avianca plans to be at around 30% of precovid capacity by early 2021, increasing to around 50% by mid-2021. , expects to be about 75% of its pre-covid size by 2023-2024.
According to Wilson Tovar, economic research manager at Stocks and Securities, the disbursements of the US $ 2,000 million will be progressive. “What is coming is an orderly process of restructuring the debts that the company has,” he explained.
Iván Felipe Agudelo, analyst at Alianza Valores, indicated that the approval would not have a major impact on the actions and that the financing would not need the Government, since the package is structured with financial support in case the Government is prohibited from participating due to the precautionary measure imposed by the Cundinamarca Court.
