Gol, Latam enter race for Avianca

Gol, Latam enter race for Avianca

M&A Corporate & Sovereign Strategy Debt Regulation Brazil Chile

Elliott Management has asked Gol and Latam Airlines to present offers of at least $70m for assets in the bankrupt carrier Avianca Brasil, the two airlines said in separate statements.

In a revised restructuring plan from Elliott, Avianca Brasil will be divided into seven units that will be auctioned off individually. Six of the units will hold Avianca Brasil's runway slots at the Congonhas, Santos Dumont and Guarulhos airports and the airline's operating certificates, while the seventh unit will have Avianca Brasil's mileage program Amigo, Gol said in a securities filing.

Local rival Azul gave Avianca Brasil BRL31.6m ($8.16m) to make payroll last month and it offered to buy $105m in assets from the bankrupt airline, including 30 Airbus A320 aircraft, 70 pairs of airport runway slots and the operating certificates. The two sides did not reach an agreement, however, and Avianca Brasil started to receive offers from other bidders.

Avianca Brasil filed for bankruptcy in December with BRL500m in debt. It increased the tally of its total liabilities to BRL1.3bn in January and then again to BRL2.7bn last month. Avianca Brasil owes roughly BRL2bn to Elliott, a hedge fund based in New York.

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