11 January, 2022 Regional

Avianca emerges from Chapter 11 restructuring

Banking, Finance and Capital Markets

Five offices of US firm Milbank and Gómez-Pinzón in Bogotá have helped Latin American airline Avianca emerge from its Chapter 11 restructuring process and eliminate debt worth more than US$1 billion.

Debt administration services provider Glas Americas acted as collateral trustee for the exit financing transaction and enlisted Philippi Prietocarrizosa Ferrero DU & Uría in Bogotá, Santiago and Lima.

Latin Lawyer understands that Perkins Coie LLP also provided counsel to Glas Americas, but this could not be confirmed before publication.

The deal closed on 1 December.

In May 2020, Avianca filed for Chapter 11 protection in New York and sought to reduce its fleet in light of the impact of the covid-19 pandemic on the business. The airline successfully used the restructuring process to obtain short-term financing and has now eliminated more than US$1 billion of debt. In October 2021, the Latin American airline secured court approval of its restructuring plan in New York, having announced plans to shift its domicile to the UK, a move that Avianca hoped would provide tax advantages.

After completing its Chapter 11 proceedings in 18 months, Avianca emerged from the process with a more efficient business model and has reaffirmed its commitment to providing reliable and on-time service. The airline hopes to continue to provide affordable travel for millions of passengers in Latin America.

Passenger revenue at Avianca halved in the wake of the covid-19 pandemic and has struggled to recover. Similarly, aviation group LATAM Airlines reported a 75% revenue drop in the second quarter of 2020 compared with the same time period in 2019. LATAM obtained an additional US$750 million debtor-in-possession financing as part of its own Chapter 11 proceedings back in November.

Counsel to Avianca

In-house counsel – Richard Galindo, Natalia Gutierrez de Larrauri, Diana Rivas, Catalina Perdomo, Maria Marquez, Juan Esteban and Pamela Rodriguez in Bogotá

Milbank

Partners Evan Fleck, Francisco Nuñez, Marcelo Mottesi, Alan Stone, George Canellos, Fiona Schaeffer, Adam Fee, Andrew Walker and Jay Grushkin, special counsel Alexandra Johnson, associates Benjamin Schak, Kyle Satterfield, Yuliya Zahoroda, Katie Cavins, Soumya Sharma, Alex Wang, Gonzalo Guitart, Steve Groff, Ross Shepard and Christina Sonageri, and international attorney Manuel Dominguez in New York; partner Gregory Bray and special counsel Daniel Denny and Jennifer Harris, and associates Andrew Park and Regina Gromen in Los Angeles; partner Tobias Stirnberg in São Paulo; partners Mark Stamp and Russell Jacobs, and associates Sarah Ullathorne, Gemma Cullen, Cosmos Fung and Lewis Whiteoak in London; partners Andrew Leblanc and Aaron Renenger and associates Erin Dexter, Julie Wolf, Dani Lee, Steve Benz, Kristina Lauria, Hannah Blazek, Riah Kim and Meredith Brumfield in Washington, DC

Gómez-Pinzón

Partner Ricardo Fandiño de la Calle and associates Daniel Flórez Linero and Silvia Robledo Rojas in Bogotá

Counsel to Glas Americas

Philippi Prietocarrizosa Ferrero DU & Uría (Colombia)

Partner Hernando Padilla and associates Ana María Ramírez and Juan Camilo Uribe in Bogotá

Philippi Prietocarrizosa Ferrero DU & Uría (Chile)

Partner Marcelo Armas and associate Pedro Valenzuela in Santiago

Philippi Prietocarrizosa Ferrero DU & Uría (Peru)

Partner Ronald Fernandez Davila and associate Fiorella Ruiz in Lima

Source: Latin Lawyer

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