Bittersweet moment for Adrián Neuhauser, CEO of Avianca

Several hours ago the decision of the American judge expert in bankruptcy policy, Martín Glenn, made the decision to approve the recovery plan with which Avianca would emerge from bankruptcy. The session, which began in the morning hours of September 14 in the arbitration room of the New York Bankruptcy Court, concluded at noon with the verdict that granted Avianca Holding SA judicial approval to send its reorganization plan creditors and they can vote on it.

With this decision, the lenders that agreed to refinance the airline’s debt in 2020 and that freed it from the need to access public resources for its recovery, will obtain 72% of the airline’s capital stock in exchange for paying $ US 935 millions.

According to the plan presented to Judge Glenn’s office, the value of the company’s outstanding shares is expected to be reduced to zero, due to the decrease in the company’s equity attributable to debtors’ liabilities with third parties and creditors, as well as the injection of capital by new investors, as contemplated in the recently approved plan and the Capital Conversion and Conversion Agreement.

However, the prediction made by the company in mid-2020, during the pandemic, begins to materialize, warning that its “shareholders may be diluted or see the value fall to almost zero.” Today the shares fall 58.2% and are trading around $ 40 pesos each. It should be remembered that Avianca shares were issued in the Colombian market at a price of $ 5,000 each in 2011. In other words, 10 years later they lost almost all of their value.

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