US Bankruptcy Court Approves $2 Billion USD Avianca DIP Financing Package

Avianca Holdings S.A. (OTCMKTS: AVHOQ, BVC:PFAVH) today announced that it has received approval from the U.S. Bankruptcy Court for the Southern District of New York to access its debtor-in-possession (DIP) financing totaling just over $2.0 billion USD.

This approval comes after Avianca had to scramble to raise additional DIP funding when a widely criticized $370 million USD loan by the Colombian government intended to be part of the DIP financing package was blocked by a Colombian court.

Avianca CFO Adrian Neuhauser said, “The approval of the DIP financing package is a significant milestone and an important step forward for Avianca. We would like to again thank our lenders for their support and confidence in Avianca’s future success. We continue to work on our go-forward operating plan in order to emerge from this process as a stronger and more efficient airline, and look forward to presenting our plan to the U.S Court as we move forward in the Chapter 11 process.”

DIP Financing Package Including US$1.217 billion of New Funds to Support Avianca’s Ongoing Operations and Execution of Reorganization Process

Anko van der Werff, President and Chief Executive Officer of Avianca, added, “With U.S. Court approval to fully access this DIP financing, Avianca has ample liquidity to support our operations as we continue flying and serving customers. As COVID restrictions begin to ease, we are pleased to have safely resumed passenger flights to 21 cities in Colombia and 14 international destinations and look forward to adding more destinations to meet our customers’ travel needs over the coming months. We thank our customers for their loyalty, and we remain steadfast in our commitment to connecting people, families and businesses across Latin America through the Chapter 11 process and beyond.”

As previously announced on September 21, 2020, the Company’s DIP financing totals approximately $2.0 billion, consisting of a $1.27 billion Tranche A senior secured financing and a $722 million Tranche B secured subordinated loan. The DIP financing includes approximately $1.2 billion of new funds ($881 million in Tranche A and $336 million in Tranche B). Funding remains subject to entry of the order by the judge in the U.S. Court and certain conditions precedent, all of which are expected to be satisfied in the coming week.

Seabury Securities LLC is serving as Avianca’s investment bank and financial advisor. Goldman Sachs Lending Partners LLC and JPMorgan Chase Bank, N.A. are serving as co-lead arrangers and joint bookrunners of the Tranche A DIP Loans. Milbank LLP is serving as Avianca’s legal advisor.

All figures in this article USD.

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