Avianca seeks approval for plan that cuts airline's debt by $3b

Avianca Holdings asked a judge for permission to exit bankruptcy under a plan that the airline says will eliminate about $3b in debt and preserve over 10,000 jobs. Latin America’s second-largest airline before the pandemic presented its restructuring plan at a hearing in New York Tuesday. If approved, the 102-year-old company is eyeing an exit from bankruptcy this year. US Bankruptcy Judge Martin Glenn appeared to side with the company when a handful of objectors claimed the proposal wrongly favored some creditors over others. Glenn asked the objecting creditors to file court papers by Thursday evening listing facts related to their complaints. He did not say when he would decide whether to approve the plan. The company said it plans to exit bankruptcy soon after winning final court approval. “We remain focused on moving forward with this process as efficiently as possible,” Avianca said in an emailed statement. Under the plan, Avianca will roll over roughly $1.6b of loans it raised during the bankruptcy process and raise $200m of new equity, according to a regulatory filing. Certain lenders and noteholders including United Airlines, Kingsland Holdings, which is controlled by Salvadoran mogul Roberto Jose Kriete Avila, and Citadel, the hedge fund founded by billionaire Ken Griffin, will get 72% of the airline’s equity in exchange for canceling more than $900m of debt, according to court papers. <br/>