Avianca to seek $1.8b with bankruptcy exit in sight

Avianca Holdings plans to raise $1.8b to repay debt and provide new financing as the Colombian airline eyes an exit from the bankruptcy reorganization it was forced into last year during the pandemic-driven travel collapse. The air carrier retained Seabury Securities LLC to help raise the exit financing, likely a combination of debt and equity, the company said in a regulatory filing Wednesday. Avianca said it will repay $1.4b in bankruptcy loans and have around $1b in liquidity when it emerges from the reorganization at some point this year. Avianca was Latin America’s second-largest airline before the Covid-19 pandemic slowed air travel to a trickle last year, leading it to file for Chapter 11 protection in a New York court in May. Latam Airlines Group and Mexico’s Grupo Aeromexico also were forced into bankruptcy as the region suffered one of the world’s sharpest drops in flights. In addition to the $1.4b in loans it plans to refinance, Avianca raised $900m from a group of investors including United, hedge fund Citadel Advisors and Salvadoran air mogul Roberto Kriete. The company is negotiating final terms to convert that tranche into equity as it builds its new capital structure. It’s “still not possible to know” whether the value of existing shares will be diluted, according to the filing.<br/>