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A hedge fund, an important businessman in the Latin American airline sector, as well as a global aeronautical conglomerate are among the investors that will provide the 2,000 million dollars of financing to Avianca Holdings, in a plan that must be submitted for approval in the Chapter process. 11 of the United States Bankruptcy Law.(You may be interested: ‘Avianca will demonstrate to the Court that a government loan is beneficial)
According to the court documents cited by the Bloomberg agency, one of the investors is the hedge fund Citadel Advisors LLC. Through an affiliate, this group and the other investors mentioned offer loans as part of the bankruptcy financing plan of Avianca for 2,000 million dollars, according to court documents.
The investors named by Bloomberg were stakeholders in the airline before it filed for Chapter 11 protection in May, and would help provide about $ 722 million in loans.
The more than $ 700 million is added to a separate tranche of approximately $ 1.3 billion of debt. Avianca said it has commitments for 2 billion in debtor funds in possession.
(Also: ‘Avianca pays a rate of more than 10% on credit of 1,300 million dollars’)
Joining Citadel, the famous hedge fund founded by billionaire Ken Griffin, are United Airlines, as well as Salvadoran air mogul Roberto Kriete, through Kingsland Holdings.
These investors would be eligible for ordinary shares when Avianca complete Chapter 11 reorganization process, based on court filings.
The loans will bear an interest rate of 14.5 percent, according to the documents. Creditors of the 1.3 billion tranche that hold the 2023 notes will have $ 220 million of accumulated debt in new loans.
They have agreed to lend an additional $ 290 million, according to a company statement. Those loans are part of Tranche A of $ 1.3 billion, which will bear an interest rate of 10.5 per cent on the London interbank offer rate.
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