Colombian flag carrier Avianca Holdings is making progress with a restructuring plan for its finances that will keep it in the air without having to take measures such as declaring bankruptcy or insolvency, company executives said on Wednesday. Over the course of the restructuring, which began last year, the company will divest its non‐core activities and simplify its fleet to improve profits and leave behind a financial crisis that arose in 2019, Reuters reported. “The company’s financial situation has turned 180 degrees.
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Avianca Holdings SA said yesterday that it reached agreements with creditors and secured fresh financing, completing a restructuring of its debt that will free up cash as it pursues a turnaround plan, Bloomberg News reported. The Bogota-based carrier received approval from major creditors with whom it had been negotiating since June, when it began to defer principal payments and announced a “re-profiling” of its debt. The company said it secured extensions of bank lines, letters of credit, and other agreements with more than 125 creditors and suppliers.
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Latin American airline Avianca will look to increase the number of passengers it can fit into a plane without enlarging its fleet as part of its efforts to overcome ongoing financial problems, its chief executive said on Thursday, Reuters reported. A video was released on social media this week showing president of the board Roberto Kriete telling employees that the airline was “broke.” The airline said the video was obtained illegally and denied that it was in a bankruptcy or insolvency process.
Avianca Holdings SA plunged to a record low after the Colombia-based airline’s chairman was seen in a leaked internal video telling employees that the company is “bankrupt,” Bloomberg News reported. The stock dropped as much as 15% in Bogota trading before paring losses. Kriete was trying to reiterate to employees the urgency of getting back to profitability, said Carlos Enrique Rodriguez, head of equity research at Bogota-based brokerage Ultraserfinco.
Avianca was a failing airline with 37 outdated planes when German Efromovich purchased it out of bankruptcy in 2004. Over 15 years the Bolivian businessman built it into a regional powerhouse as Latin America’s second-largest carrier. But for all its success, the Bogota-based company is now back on a rocky foundation, Bloomberg News reported. Its stock price is down by almost 75% since it went public in 2011 and its bonds are trading in distressed territory amid concerns it will struggle to refinance debt. Avianca’s first-quarter loss was the biggest since 2015.
Colombia's Avianca Holdings SA said on Monday it is experiencing "reputational harm" from its association with Avianca Brasil, an air carrier that licenses its name and has canceled over 1,000 flights amid a bankruptcy restructuring, the International New York Times reported on a Reuters story. Both Aviancas belong to the same family-owned business group, led by brothers German and Jose Efromovich, but are maintained as separate companies.
Colombia’s government submitted a broad tax-overhaul proposal to Congress that raises taxes on ordinary Colombians and cracks down on evasion in a bid to fill a budget shortfall created by lower oil prices, The Wall Street Journal reported. At stake is the vaunted sovereign credit rating in Latin America’s fourth-largest economy and President Juan Manuel Santos ’s ambitious plans to modernize a poverty-stricken countryside. Both Fitch Ratings and Standard & Poor’s earlier this year warned of downgrading Colombia’s BBB rating unless the government found a way to raise revenue.
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Acute energy shortages, historically a warning sign for unpopular Latin American leaders, are threatening to undermine the government of Colombia and plunge neighbouring Venezuela deeper in to crisis, the Financial Times reported. Free-market Colombia, until recently a regional star, and the crisis-ridden, socialist Venezuela have both been forced to introduce energy-saving measures amid a combination of factors aggravated by a lack of rain due to the El Niño weather phenomenon. Venezuela’s government even extended the Easter holiday from three to five days to save electricity.
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Latin America’s largest independent oil producer, Pacific Exploration & Production Corp., is evaluating six buyout offers to avoid bankruptcy, according to people familiar with the negotiations, The Wall Street Journal reported. The final offers, which include a management buyout and up to $500 million in loans, are due Wednesday, with the board expected to make a decision by the end of the week, the four people said.
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Forty-three percent of companies in Colombia's oil sector are at high risk of going bankrupt as the industry reels from the recent halving of oil prices, according to a survey presented to the Andean country's congress this week, Reuters reported. The survey by the Colombia's companies' regulator polled 53 companies with total assets of about $10 billion but it did not include state-run oil producer Ecopetrol or two Toronto-listed companies, Pacific Rubiales Energy Corp and Canacol Energy Ltd.
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