The creditors of Avianca Brasil, which is bankruptcy protection, have agreed to the proposal that will auction off the assets of the company in order to raise funds to repay part of its debts.
The lawsuit, however, took a turnaround last week when airlines LATAM and Gol announced their intention to participate in the auction. Invited by the group Eliott, one of Avianca’s main creditors, the companies announced they will bid at least $ 70 million for one of the planned units.
Eliott, which owns 75 percent of Avianca’s $ 700 million debts, has persuaded other creditors to split assets into seven parts to make the auction more attractive. The maneuver neutralized the proposal made by Azul Linhas Aéreas that had announced the intention to acquire all the assets by $ 105 million.
In the new structure, the airplanes and slots in the busiest airports will be divided into six lots while the “Amigo” mileage program will be part of the seventh lot.
Return of aircraft
Under the agreement, Avianca will no longer be able to prevent the return of airplanes to its lessors, which was endorsed by the Brazilian courts, although it goes against the Cape Town Treaty, an agreement that obliges tenants to deliver aircraft for nonpayment.
Already waiting for this, Avianca has considerably reduced its fleet and flight network in April. With only 26 aircraft, the company plans to fly to 23 destinations, failing to operate at major airports such as Galeão, Rio de Janeiro.
The forecast now is for the auction to take place in the coming weeks.