Creditors approve Avianca Brasil plan as antitrust concerns loom

Creditors led by hedge fund Elliott Management approved on Friday a restructuring plan for bankrupt airline Avianca Brasil, hours after the country’s antitrust regulator announced preemptively that the plan could run afoul of competition laws. The regulator, known as CADE, said on Friday morning that it could block the plan, which Avianca Brasil hopes could raise some $210m. The carrier filed for bankruptcy protection in December. CADE’s warning means the creditor approval may not bring short term relief to Avianca Brasil given that the regulator itself said its review of the deal could last some eight months. During that time, the cash-strapped carrier would have to operate with its own funds, or take on additional debt. The plan was modified on Friday evening during a creditors’ meeting, although the new details were not immediately available. Under Avianca Brasil’s plan filed this week, Gol Linhas Aereas Inteligentes SA and LATAM Airlines Group would buy Avianca Brasil’s airport rights, known as slots, in three high-traffic terminals. That plan would raise much-needed funds but is high-risk, lawyers said, because the carrier could be left hanging for a long time without access to new cash injections. If Avianca Brasil fails as a business before receiving CADE approval, then it will be too late and there will be no airport slots to sell.<br/>