Avianca’s Parent Company Plans IPO to Secure Comeback
Avianca Holdings SA, the parent company of Latin America’s second-largest airline, is planning an initial public offering (IPO) to help secure its comeback from bankruptcy. The company is aiming to raise $500 million in the IPO, which is expected to take place in the second half of 2023.
Avianca, which is based in Colombia, filed for bankruptcy in May 2020 after the coronavirus pandemic caused a sharp decline in air travel. The company was forced to restructure its debt and cut costs in order to survive.
Avianca’s Restructuring Plan
Avianca’s restructuring plan was approved by a U.S. bankruptcy court in December 2020. The plan included a debt-for-equity swap that allowed bondholders to exchange their debt for a stake in the company. The bondholders agreed to convert $2.5 billion of debt into equity, giving them a majority stake in the company.
Avianca’s restructuring plan also included a $1.2 billion capital injection from its shareholders, including United Airlines, Kingsland Holdings, and Synergy Group. The capital injection was used to pay off the company’s creditors and fund its operations.
Bondholders Bet Big on Avianca
Avianca’s bondholders have bet big on the company’s comeback. The bondholders have invested heavily in the company, taking a majority stake in the company and providing a capital injection of $1.2 billion.
The bondholders are now hoping to cash in on their investment by taking the company public. The IPO is expected to value the company at around $3 billion, which would give the bondholders a return on their investment of more than 200%.
Avianca’s Plans for the Future
Avianca is planning to use the proceeds from the IPO to fund its operations and expand its fleet. The company is also planning to launch new routes and increase its presence in Latin America.
Avianca is also planning to invest in new technology, such as artificial intelligence and machine learning, to improve its operations and customer experience. The company is also planning to invest in digital marketing and loyalty programs to attract more customers.
Avianca’s Outlook
Avianca is optimistic about its future prospects. The company is expecting to return to profitability in 2023 and is aiming to become the leading airline in Latin America.
Avianca is also expecting to benefit from the increasing demand for air travel in Latin America. The region is expected to see a surge in air travel as the economy recovers from the pandemic.
Avianca’s Comeback
Avianca’s comeback from bankruptcy has been remarkable. The company has managed to restructure its debt, secure a capital injection from its shareholders, and now plans to go public.
The company’s success is a testament to the resilience of the airline industry and the commitment of its bondholders. Avianca’s IPO is expected to be a success and will be a major milestone in the company’s comeback story.