United Airlines shakes up Avianca leadership after shareholder default
Reuters
Published May 24, 2019 04:30PM ET
United Airlines shakes up Avianca leadership after shareholder default
By Marcelo Rochabrun and Sanjana Shivdas
(Reuters) - United Airlines launched a management overhaul at Colombia's Avianca Holdings on Friday, removing top shareholder German Efromovich from controlling the cash-strapped airline, according to regulatory filings.
United, which is proposing a three-way joint business agreement with Avianca and Panama's Copa, said the move follows a default by Efromovich's holding company BRW Aviation on a $456 million loan it made six months ago.
The Chicago-based airline, part of United Continental Holdings Inc, is seeking a deeper foothold in Latin America, which is considered ripe for air travel growth.
United's loan was backed by Efromovich's 51.5% stake in Avianca. However, the U.S. airline's contract with its pilots restricts the company from majority ownership in another carrier. As a result, United is ceding voting rights to Kingsland Holdings, the Colombian carrier’s second-largest shareholder.
Kingsland is controlled by Roberto Kriete, who was embroiled in a long and bitter legal fight with Efromovich over the best strategy for heavily indebted Avianca.
Another Efromovich carrier, Avianca Brasil, filed for bankruptcy protection in December and its operations were suspended on Friday by Brazil's civil aviation regulator ANAC.
United said it was willing to loan up to $150 million to Avianca Holdings.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.