Elliott Funds to Take Part in Avianca's $75 Million Capitalization

Funds controlled by activist investor Elliott Management have agreed to extend $75 million in financing to bankrupt airline Avianca Brasil, according to documents seen by Reuters on Wednesday. A term sheet signed by Manchester Securities Corp, Elliott Associates and Elliott International was submitted to the court overseeing Avianca Brasil’s bankruptcy proceedings on Monday, the document shows. Avianca Brasil on Friday filed a reorganization plan with the court in which the carrier said it was hoping to secure $75 million in financing to continue operations and emerge from bankruptcy, Reuters reported. The new capital would be invested through convertible debt instruments to be issued by a new company called Life Air to be created as part of the restructuring, Avianca said in the plan. The investment will leave the Elliott funds with a 49 percent stake in that new entity, financial newspaper Valor reported. Avianca Brasil, Brazil’s fourth-largest airline, filed for bankruptcy protection in December saying its operations were threatened by lessors trying to repossess airplanes. Read more