Avianca has failed to overturn a ban on the Colombian government participating in its debtor-in-possession (DIP) financing but intends to press ahead with gaining US bankcrupcty court approval for its DIP plan.
The carrier says that in a 15 September decision the Administrative Court of Cundinamarca has upheld a previous bar on the Colombian government providing a $240 million loan as part of its DIP financing package.
Avianca, which is appealing this decision, notes that the financing was reserved for the government’s “eventual participation” and that its DIP financing package is not “contingent” on securing it.
The Star Alliance carrier has succeeded in securing $2 billion of DIP financing in two tranches from a number of would-be investors.
A total of $240 million of the tranche A financing has been structured as a backstop commitment in which the Colombian government was expected to participate.
The Bogota-based carrier says the next hearing in the USA in its Chapter 11 proceedings will be on 5 October and it expects a “favourable outcome” in its application to approve the DIP financing proposal.