The announced financial lever for Avianca was finally announced. TOVianca Holdings reached an agreement with United Airlines and Kingsland Holdings S.A. in relation to an investment proposal of up to US $ 250 million.
According to the disbursement conditions established, The loan will be four years, with an interest rate of 3%. The interest will be capitalized until the credit expires, granting greater cash flexibility to Avianca.
Other terms of the agreement indicate that The financing may be converted into shares at the discretion of Avianca – at an equivalent price for each of US $ 4.6217, which represents a 35% prize on the average price of the share of the last 90 days –, subject to certain conditions, if the share price stably exceeds seven dollars, or voluntarily at the discretion of United Airlines and Kingsland Holdings.
(Also read: Avianca advances in its financial plan, but steps are missing)
The loan will be guaranteed by the equity interests of Avianca Holdings in its main subsidiaries.
According to the company, Now it is working on the formalization and final documentation, which is expected to close in mid-October.
As reported, financing remains subject to conditions for closure, including achieving a comprehensive rescheduling agreement with the creditors and suppliers of Avianca and the definitive closing of the 2020 bond exchange for US $ 550 million.
(In addition: Avianca extends term to negotiate bonds)
"We trust that Avianca will successfully reach agreements with its other strategic allies, and we will work together to complete the final documentation of our loan, "said John Gebo, senior vice president of United alliances.
"We are very happy to have reached an agreement with Avianca Holdings on the terms of this loan," said Roberto Kriete, president of Kingsland Holdings.
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