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The São Paulo Court of Justice has accepted a petition filed by Avianca Brasil and has lifted the suspension of the auction of air operations according to which the company intends to pay its debts, reported the Brazilian media.
Now, Avianca Brasil has to set a new date for the auction. In this regard, the lawyer of the company Joel Luis Thomas Bastos said that it would be badyzed if it was necessary to change the wording of the auction call or to modify only the date, according to statements made by Valor Economica.
Like this Avianca could allow new companies to participate in the auction, in addition to Latam Airlines and Gol, which in April entered into separate agreements with creditors to participate in the tender and undertook to submit bids of at least US $ 70 million each.
The auction was originally scheduled to take place on May 7, but was suspended by the court which accepted an appeal by Swissport Airport Services Operator, one of Avianca's creditors, who alleged that the division of badets between auctions would lead to an increase in market concentration in favor of Latam Airlines and Gol.
The deal was reached after Azul, the third largest airline in Brazil with 19% of traffic, offered to buy the majority of the rights to the slots that Avianca Brasil holds for $ 105 million.
The plan has not fully convinced the creditors of the companies that manage Avianca Brasil, including the Elliott fund, which has devised a new proposal. To this end, it has established a model in which Avianca's badets have been divided into seven independent production units (Upi). With this new system, Elliott invited Latam Airlines and Gol to participate in the process, leading the Brazilian air traffic with respective shares of 32% and 36%.
Azul asked the court to create a single production unit by pooling all badets of Avianca Brasil, which could then be sold to Azul for $ 145 million. Azul, who had indicated that Gol and Latam had the intention of preventing him from gaining access to the lucrative route between Sao Paulo and Rio de Janeiro, said the plan of The restructuring approved by the creditors in April was affected by the direct payments made to Elliott by Gol. Latam, ignoring the rights of other creditors.
However, the court dismissed Azul's application and its executive director, John Rodgerson, said the company would not appeal the decision and that she was not considering raising her bid regarding the badets of Avianca Brasil.
On May 24, the Brazilian National Civil Aviation Agency decided to suspend all of Avianca's activities until it demonstrates its ability to continue operating safely. Before all these problems, Avianca was the fourth largest airline in Brazil.
Avianca Brasil, the trademark of Oceanair Linhas Aéreas, is not part of the Avianca Holdings S.A. group of companies., based in Colombia, but both have integrated a holding company controlled by the same Colombian and Bolivian investor, the German Efromovich. The company filed for bankruptcy protection in December, saying its operators were threatened by homeowners seeking to recover their devices.
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