Avianca may get ‘lifesaver’ aid as Colombia mulls equity stakes

An emergency measure allowing Colombia’s government to take equity stakes in private companies opens the door for a bailout of the nation’s largest airline, Avianca Holdings, which declared bankruptcy last month amid an unprecedented downturn in travel. The new regulation, which permits the government to take minority positions in companies that have been impacted by the sharp economic downturn, “can be a lifesaver for Avianca,” said Carlos Enrique Rodriguez, director of equity research at Ultraserfinco SA, a brokerage. The decree announcing the measure, which was posted to the presidency’s website Friday, didn’t say how much the government is willing to invest or identify specific companies that may be eligible. But Finance Minister Alberto Carrasquilla said last month that the government would look to help the carrier “in some way.” Shareholders may be required to buy back the government stake after a certain time, according to the decree.<br/>