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720B
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United Continental close to sealing deal on Avianca loan, partnership: WSJ

Fri Nov 30, 2018 9:28 pm

As per Wall street journal, the Avianca - United JV is getting close to be finalized. The deal involves United loaning money to Avianca so debt owed to a hedge fund (Elliot management) can be paid. Avianca shares controlled by Efromovich will be put up as collateral for the loan. Avianca's German Efromovich had said before there would no money involved on this deal; but that does not seem to be the case now.


https://www.reuters.com/article/us-avia ... SKCN1NZ2K7
 
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adamblang
Posts: 1353
Joined: Sat Jul 19, 2008 5:47 pm

Re: United Continental close to sealing deal on Avianca loan, partnership: WSJ

Fri Nov 30, 2018 9:31 pm

Also breaking:

United Airlines Expands Partnership With Copa and Avianca to Better Serve Customers Traveling Between U.S. and Latin America

United Airlines today announced it has reached an agreement with Copa, Avianca and many of Avianca's affiliates, for a joint business agreement (JBA) that, pending government approval, is expected to provide substantial benefits for customers, communities and the marketplace for air travel between the United States and 19 countries in Central and South America.


https://hub.united.com/2018-11-30-unite ... 05064.html
 
simpv
Posts: 167
Joined: Wed Sep 07, 2016 12:19 pm

Re: United Continental close to sealing deal on Avianca loan, partnership: WSJ

Fri Nov 30, 2018 9:36 pm

Perhaps not great for consumers, but a nice counterweight to the LATAM-AA partnership.

What routes can we expect then from BOG?
 
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LAXintl
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Re: United Continental close to sealing deal on Avianca loan, partnership: WSJ

Fri Nov 30, 2018 9:37 pm

Lets see.

I am not sure the DOT/DOJ will approve this proposed JBA so easily.
From the desert to the sea, to all of Southern California
 
Bricktop
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Re: United Continental close to sealing deal on Avianca loan, partnership: WSJ

Fri Nov 30, 2018 9:42 pm

I wonder if AV will switch from JFK to EWR then?
 
pipeafcr
Posts: 431
Joined: Sat Jun 13, 2009 1:47 am

Re: United Continental close to sealing deal on Avianca loan, partnership: WSJ

Sat Dec 01, 2018 12:15 am

Bricktop wrote:
I wonder if AV will switch from JFK to EWR then?


Doubt it, there's no replacing JFK
Felipe Carrillo
 
720B
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Re: United Continental close to sealing deal on Avianca loan, partnership: WSJ

Sat Dec 01, 2018 12:17 am

according to Colombia's news outlets, the loan is around US $ 465 million dollars

The JV needs to be approved in the following countries:

Agentina, Belice, Bolivia, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guyana, Guyana Francesa, Guatemala, Honduras, Nicaragua, Panamá, Paraguay, Perú, Surinam, Uruguay , USA and Venezuela.

At the moment, Brasil, México and Ecuador markets are not covered by the JV. Ecuador could be integrated in the near future
 
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AVENSAB727
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Re: United Continental close to sealing deal on Avianca loan, partnership: WSJ

Sat Dec 01, 2018 12:31 am

Looks like Avianca could start its own IAH-BOG flight(It has been rumored here before), and hopefully UA will add IAH-CLO/ Medellin, and maybe Cali.
Always look on the bright side of Life!
 
Nicknuzzii
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Re: United Continental close to sealing deal on Avianca loan, partnership: WSJ

Sat Dec 01, 2018 1:08 am

Correct me if I'm wrong, but doesn't Avianca already serve EWR?
 
720B
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Re: United Continental close to sealing deal on Avianca loan, partnership: WSJ

Sun Dec 02, 2018 11:53 am

Nicknuzzii wrote:
Correct me if I'm wrong, but doesn't Avianca already serve EWR?


It does, from El Salvador, not from Bogota
 
MIflyer12
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Re: United Continental close to sealing deal on Avianca loan, partnership: WSJ

Sun Dec 02, 2018 12:44 pm

720B wrote:
according to Colombia's news outlets, the loan is around US $ 465 million dollars


That's a big loan for a group with ~130 aircraft. It will be interesting to see what security UA gets: equity conversion rights, board seats, aircraft collateral...
 
720B
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Re: United Continental close to sealing deal on Avianca loan, partnership: WSJ

Sun Dec 02, 2018 10:19 pm

MIflyer12 wrote:
720B wrote:
according to Colombia's news outlets, the loan is around US $ 465 million dollars


That's a big loan for a group with ~130 aircraft. It will be interesting to see what security UA gets: equity conversion rights, board seats, aircraft collateral...


German Efromovich (main stock holder) own stock is to be used as collateral
 
Nicknuzzii
Posts: 1904
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Re: United Continental close to sealing deal on Avianca loan, partnership: WSJ

Sun Dec 02, 2018 10:40 pm

I hope this means Copa may enter the EWR market
 
Nicknuzzii
Posts: 1904
Joined: Sat Sep 15, 2018 5:57 pm

Re: United Continental close to sealing deal on Avianca loan, partnership: WSJ

Sun Dec 02, 2018 10:40 pm

I hope this means Copa may enter the EWR market
 
QF93
Posts: 30
Joined: Sat Oct 22, 2016 10:44 am

Re: United Continental close to sealing deal on Avianca loan, partnership: WSJ

Sun Dec 02, 2018 11:45 pm

MIflyer12 wrote:
720B wrote:
according to Colombia's news outlets, the loan is around US $ 465 million dollars


That's a big loan for a group with ~130 aircraft. It will be interesting to see what security UA gets: equity conversion rights, board seats, aircraft collateral...


Curiously, the Reuters article suggests the loan is being made to Synergy Group Corp / Efromovich, and not to Avianca. According to SEC filings Efromovich can repay the loan by way of transferring over his existing shares in Avianca, and United has been given a separate call option over those existing shares.

I assume Efromovich is going to use the cash to invest back into Avianca, but I haven’t been able to see any reports about that. Otherwise Avianca never sees a cent of that $456m.

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