United reaches deal on Avianca loan, partnership

United Continental Holdings has sealed a deal to partner with Avianca Holdings by agreeing to an unusual arrangement to pay off debt owed to a hedge fund. United will lend US$456m to a company controlled by German Efromovich, which owns just over half of Avianca. The funds would be used to repay a loan from Elliott Management, people familiar with the matter said. Avianca shares controlled by Efromovich, representing more than 51% of the company, will be put up as collateral for the loan. As part of the deal, the airlines will form a 3-way joint business agreement with Holdings to share revenues, integrate service and coordinate pricing and schedules on their networks between the US and Latin America, excluding Brazil. <br/>