Avianca is the subject of a plan by its new financiers to convert it to a lower cost with a view to merging it with Chilean Sky Airlines, after negotiating with Gol and Jetsmart. The process, under which Sky will retain 70% of Avianca after injecting just under $1 billion, does not mean that either company will rebrand.
Holger Polmann, CEO of Sky, who will also become regional director of the new Avianca. The funding will be managed by Pullman through BTG Pactual and will include the offering of a third of Sky, which He has been drawing up an airline procurement plan in the area for several months, which has now succeeded in cSupported by Avianca and its partners Elliot and Caoba.
Sky is hoping that Latam, once out of its strong crunch, will turn into lower cost as well, and Sky, going forward, is hoping to gain an advantage. In 2023, the airline is waiting for the first Airbus A321XLR, which ordered 10 units, which can travel almost nine thousand kilometers non-stop, to fly between Santiago de Chile and Miami.
However, Avianca informed that the airline was not involved in negotiations with Sky Airlines and that they are not aware of the plans of its funders who are part of Tranche B of the company’s restructuring plan, which is in the process of being approved by a US court.
October 26, which is the date on which approval of said financing plan will be determined, within the US Bankruptcy Code Chapter 11 process “If the plan is confirmed by a court, existing Tranche B funders will receive repayment from their financing, a controlling interest in the new reorganized entity ‘,” the airline noted.
In addition, he said he did not know the expectations of Tranche B funders, “in their ultimate capacity as observers, once the plan was confirmed”, reiterating that “so far, the company has not been involved in negotiations with Sky and is unaware of any investment by its funders in Sky, as well as to the terms and conditions of any negotiations that any Tranche B financiers may have with Sky or its shareholders,” the company said.
It appears that Sky Airlines will be willing to sell 40% of the company, either with a bond or with a direct investor. I have already contacted some interested companies such as GOL, Indigo Partners, Jetsmart owner and entrepreneur Nicolás Ibáñez, but with investment funds Elliot Management and Caoba, the negotiations could have moved forward. This money is part of Tranche B’s Avianca financing scheme, as recorded by El Financiero.
REPORTUR.co It was reported at the time that airlines Avianca and Chilean Sky would merge, allowing them to form the largest low cost carrier in Latin America. This merger will begin in late 2021 and early 2022, but the airlines will maintain their brands. (Avianca and Sky merger: Latin America’s largest low cost.)
Although not many details are known about the alleged merger, it has emerged that Holger Pullman, president of Sky Airlines, will be the new airline’s regional director. Before the pandemic began, Sky had invested nearly $500 million in an Airbus A320neo to operate long-haul flights and with air operations suspended, due to COVID-19, had to rethink its funding.