The creditors of Avianca Brasil approve Elliott's plan

Creditors of the troubled airline Oceanair Linhas Aereas Ltda. and its holding company, AVB Holding SA, which operates under the brand Avianca Brasil, have approved a plan to restructure a debt of 2,800 million reais (723 million USD).

The plan was approved by 80% of the creditors, the company said in a statement sent by email.

Avianca Brasil proposed the creation of six commercial units that include landing and take-off rights at various airportsas well as employees to operate the flights; and a seventh unit will be responsible for the Amigo loyalty program. The units will be auctioned and the funds raised will be distributed among the creditors, taking into account the order and limits established by the judicial restructuring plan. The proposal will be submitted to the courts for final approval.

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Gol Linhas Aéreas Inteligentes SA and Latam Airlines Group SA They have already committed to offer a minimum bid of US $ 70 million for one of the units, without specifying which one. The proposal contrasts with the offer made by Azul SA in March of an amount of 105 million US dollars for a different set of airport and license fees for Avianca Brasil, as well as for aircraft .

Elliott Associates LP and Elliott International LP, which owns more than 70% of the loan, designed the proposal for seven production units and negotiated directly with Gol and Latam. Azul and Avianca Brasil had negotiated an exclusivity clause. Azul and Elliott's lawyers discussed at length the best option for Avianca Brasil's creditors at a meeting that lasted nearly eight hours on Friday.

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Elliott's spokesperson, Stephen Spruielldid not respond to e-mails sent outside of working hours in which comments were requested.

The troubled airline, controlled by the Germán and José Efromovich brothers, filed for judicial protection against creditors in December. He has already received $ 109 million in indebtedness from failing companies or DIPs of Elliott and Azul. Following the approval of the restructuring plan, Gol Linhas Aéreas SA and Latam Airlines Group SA will receive two additional US $ 8 million DIP loans from Gol Linhas Aéreas SA to continue their activities. at least until the end of the first auction.