Bankrupt Avianca Brasil lures Gol, LATAM bids, Azul role uncertain

Brazilian airline Avianca Brasil plans to split into seven units that it will auction off separately, with rivals LATAM Airlines and Gol Linhas Aereas Inteligentes both planning to bid for some of those parts in a bankruptcy auction. The plan to split up the carrier, filed in a Brazilian court on Wednesday, is a significant departure from a previous proposal and adds fresh competition for some of the most-coveted airport slots in Brazil. But it also shuts the door on a previous offer by competitor Azul SA. Azul signed a preliminary agreement this month to pay at least $105m for a selection of Avianca Brasil’s assets, a proposal that had been considered a coup by analysts who saw it as a way for Azul to challenge its bigger competitors: LATAM and Gol. Azul also last month gave Avianca Brasil a much-needed cash injection of 31.6m reais ($8.21m) after it fell behind on its payroll. But Avianca Brasil’s new plan involves dividing up the assets Azul sought, which include airport slots and its loyalty mileage program, into multiple new companies. Gol and LATAM are now offering at least $70m each, and both said their bids had been requested by Avianca Brasil’s largest creditor, hedge fund Elliott Management. A person involved in the bankruptcy proceedings said last week that disagreements had emerged between Azul and creditors that threatened to derail the initial $105m offer.<br/>