Avianca announced 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 11, pursuant to the exchange offer launched by the Company on August 14.
Adrián Neuhauser, Avianca Chief Financial Officer, said:
“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, 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 25, and bondholders who have not yet validly tendered can tender through that date.