- A substantial majority of the outstanding principal of Avianca Holdings' May 2020 bond has been tendered under the bond exchange launched August 14
- The Company is working to grant the guarantees offered to the bondholders and to finalize the transaction.
- The deadline for the exchange offer has been extended to September 25th, and bondholders who have not tendered their bonds can elect to tender until that date
BOGOTA, Colombia, Sept. 12, 2019 /PRNewswire/ -- Avianca Holdings S.A. (the "Company" or "Avianca") (NYSE: AVH, BVC: PFAVH) announced today that 86.4% of the outstanding principal of its US$ 550 million bonds due May 2020 had been validly tendered as of midnight on September 11th pursuant to the exchange offer launched by the Company on August 14th.
Adrián Neuhauser, Chief Financial Officer of the Company, commented: "We are very grateful for the broad participation achieved in the exchange. The high percentage of bonds tendered demonstrates our bondholders' confidence in the Company's long-term plan, focused on reducing leverage levels, increasing cash flow, and optimizing profitability and operational efficiency."
The president of Kingsland Holdings Limited, Roberto Kriete, added: "We are very satisfied with this outcome, which represents a critical step in the plan laid out by the Company. We expect Avianca to quickly reach agreement with its other key creditors and stakeholders in order for us to be able to carry out, together with United Airlines, our previously announced investment and continue to move forward with the Avianca 2021 plan."
"United congratulates Avianca Holdings on successfully achieving the exchange of 86.4% of the outstanding principal amount of their May 2020 bonds," said John Gebo, United's senior vice president of Alliances. "We are also pleased to confirm that this achievement is sufficient to satisfy United's requirement for the exchange of these May 2020 bonds, regarding our previously announced offer, together with Kingsland, to loan $250 million to Avianca Holdings. Our loan remains contingent on certain other conditions being met by Avianca Holdings, including certain commitments and waivers made by other stakeholders."
All participating bondholders will receive secured notes as described in the exchange offer memorandum. In addition, such notes will automatically exchange for new notes with a 3-year extended maturity and a 9% coupon, subject to completion of a US$ 250 million financing led by United Airlines and Kingsland Holdings Limited in Avianca.
Avianca is working swiftly to formalize the necessary consents from other lenders, banks and financial institutions in order to grant the guarantees offered in the exchange and finalize the process. The Company has extended the exchange deadline through September 25th, and bondholders who have not yet validly tendered can tender through that date.
About Avianca Holdings:
Avianca is the commercial brand for the collection of passenger airlines and cargo airlines under the umbrella company Avianca Holdings S.A. Avianca has been flying uninterrupted for 100 years. With a fleet of 175 aircraft, Avianca serves 76 destinations in 27 countries within the Americas and Europe. With more than 21,000 employees, the Company earned US$4.8 billion in 2018 and transported 30.5 million passengers. On February 22, 2019, Avianca Holdings, S.A. announced its corporate transformation plan consisting of four key pillars: 1) the improvement of operational indicators, 2) fleet adjustments, 3) the optimization of operational profitability and 4) repositioning of non-strategic assets. Last May 24th, control of the Company was assumed by Kingsland Holdings Limited, an independent third party of United Airlines.
Kingsland Holdings Limited is a shareholder of Avianca Holdings, S.A. with 40 years of aviation experience. Kingsland is chaired by Roberto Kriete, who has been part of the Board of Directors of Avianca Holdings S.A. since 2010. He was the founder of Volaris, a pioneer of TACA and president of the Latin American Air Transport Association.