Avianca Stops Servicing Debt Principal & Lease Payments, Announces No Dividends

Colombian airline Avianca (NYSE: AVH, BVC: PFAVH) over the weekend admitted in a 6-K filing with the US Securities & Exchange Commission (SEC) that, as the Coronavirus COVID-19 pandemic continues to impact its operations, it has begun to defer payments on long term leases and  on principal on some of its outstanding debt. The airline has also offered to all of its employees a voluntary unpaid leave program; accepted to date by 14,000 employees.

See also: Avianca Downgraded To CCC By Standard & Poor, Credit Watch Negative

“Avianca is actively seeking mutually satisfactory agreements with its key suppliers, strategic lenders and other creditors to address the current scenario. As this situation unfolds, Avianca will continue to provide updates on other measures undertaken to protect its cash position to the extent possible,” said the company in a statement.

The airline’s annual meeting was held last Friday, March 27 where shareholders approved the decision not to deliver annual dividends for 2019.

At the meeting, shareholders also elected the following persons as directors of the Company for the period between March 2020—March 2021:

Non-Independent Directors

• José Gurdian *
• Roberto Kriete **

Independent Directors

• Oscar Dario Morales *
• Richard Schifter *
• Sergio Michelsen *
• Jairo Burgos De la Espriella *
• Fabio Villegas *
• Roberto Zamora *
• James P. Leshaw **
• Álvaro Jaramillo *** Consensus Director
• Rodrigo Salcedo *** Consensus Director

* Nominated by BRW Aviation LLC (controlled by United Airlines)

** Nominated by Kingsland Holdings Limited (controlled by Roberto Kriete)

*** Jointly nominated by BRW Aviation LLC and Kingsland Holdings Limited.