Former Avianca Chairman Offers To Buy Ultra Air For $1 US Dollar
In Colombia, local media is reporting that South American industrialist Germán Efrómovich (above) has offered aviation entrepreneur William Shaw and the shareholders of insolvent low-cost airline Ultra Air the tidy sum of $1 US Dollar to take over the airline.
Efromovich is said to have stipulated that he would not pay managerial compensation or severances as part of any such deal, and reports say that Shaw and other investors have already rejected the offer. According to Colombian daily El Tiempo, Ultra Air owes $8 million USD in bank debt and $14 million USD in outstanding accounts payable.
In Colombian aviation, truth is stranger than fiction.
Bolivian-born Germán Efromovich entered the airline business when a debtor in Brazil paid him in kind with a single aircraft. He ended up purchasing a controlling interest in then-struggling Colombian airline Avianca in 2004, growing it into a thriving international airline until disputes with minority shareholder Roberto Kriete and a crippling pilots’ strike led to operational problems and Avianca’s bankruptcy soon after the COVID pandemic began. When Efromovich couldn’t pay back a loan from United Airlines collateralized by his shares in Avianca, he lost control of the airline and was unceremoniously ousted and replaced by his nemesis Kriete.
Efromovich, who still owns assets such as Medellín’s iconic Intercontinental Hotel and his Movich chain of business hotels, has been on something of a comeback after launching Italian carrier Aeroitalia, and has even become a popular youtuber.
If Efromovich were to acquire Ultra, or another Colombian airline asset, it would set up an interesting “rematch” of sorts between himself and Roberto Kriete, now chairman of Avianca. Efromovich’s Avianca purchased Taca Airlines, started by Kriete’s father and run by Kriete out of El Salvador. At first a friendly deal, the two tycoons fell out when Kriete accused Efromovich of mismanaging Avianca and self-dealing to the detriment of shareholders. It must have been bitter when United Airlines booted Efromovich and replaced him with arch-nemesis Kriete as chairman. Efromovich, who has spoken publicly in the past about his distaste for the low-cost airline business model, would find himself back to take on his former airline now run by a man who sued and eventually replaced him.
It has yet to be seen where this leaves the serial entrepreneur William Shaw. Originally from Mexico, he has bet big on Colombia with his two creations, Viva and Ultra both grounded within a month. Neither airline has yet entered liquidation, so conceivably, one or both could possibly fly again. Stay tuned.