Avianca Finalizes Restructuring With Creditor Agreements

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. It was a critical step in a plan being pursued by Chief Executive Officer Anko van der Werff and Chief Financial Officer Adrian Neuhauser, who took over mid-year. With the agreements finalized, the company received a $250 million loan from stakeholders. It also announced yesterday that $125 million in additional financing, including a commitment from billionaire Ken Griffin’s Citadel. The management team is putting a plan in place to boost profitability and restore investor confidence by cutting leverage, reducing its fleet size, eliminating unprofitable routes while adding new destinations and focusing on flights through its hub in Bogota. Read more.