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AVH - Avianca Holdings SA News Story

$0.88 0.0  0.0%

Last Trade - 08/05/20

Sector
Industrials
Size
Micro Cap
Market Cap £n/a
Enterprise Value £n/a
Revenue £2.53bn
Position in Universe th / 6858

UPDATE 1-Avianca Brasil lessor set to seize 20 pct of airline's fleet -source

Fri 11th January, 2019 6:30pm
(Adds denial from Avianca Brasil)
    By Marcelo Rochabrun
    SAO PAULO, Jan 11 (Reuters) - Aircastle  AYR.N  is set to
repossess 10 jets from Avianca Brasil, the country's No. 4
airline, after a bankruptcy hearing on Monday, a source familiar
with the matter said, potentially disrupting flights for
thousands of passengers. 
    The 10 Airbus A320 planes represent 20 percent of Avianca
Brasil's current fleet, according to data provided by Brazil's
aviation regulator, raising doubts about the carrier's ability
to fly its full flight schedule if the aircraft are seized. 
    And it could lose more planes in the future. GE Capital
Aviation Services  GE.N  and an affiliate are seeking to
repossess 12 Airbus A320s from Avianca Brasil, according to
James Luton, a GE spokesman. 
    Aircastle, as well as GE Capital Aviation and its affiliate,
lease aircraft to Avianca Brasil, whose whole fleet of 46
aircraft is leased from other companies.
    After initially declining comment, Avianca Brasil issued a
statement denying what it called "the speculative content" of
Reuters' story but did not deny any specific statements. The
airline added that it is "completely focused" on keeping
operations going as normal and that it had transported more than
1 million passengers on 9,000 flights since Dec. 1. 
    When the airline filed for bankruptcy protection last month,
the airline discussed the possible loss of 14 planes, which it
said would affect 77,000 passengers over a three-week period. 
    Avianca Brasil filed for bankruptcy last month after years
of mounting losses and late aircraft payments. 
    Bankruptcy filings, while providing protection from
creditors, do not cover leases. 
    Between the end of 2016 and September 2018, Avianca Brasil's
liabilities to aircraft lessors quintupled to 415 million reais
($112 million), according to the carrier's financial statements.
    A Brazilian bankruptcy judge stayed a decision that would
have allowed Aircastle to repossess the planes last month. That
stay expires on Monday. 
    Since the stay was issued, the source said, Avianca Brasil
has not made any proposal to Aircastle that would have allowed
the carrier to keep the planes. Avianca Brasil owes Aircastle
more than $30 million, the source added. 
    The source did not want to be named because it was not
allowed to discuss the issue publicly.
    The stakes are also high for Aircastle, as Avianca Brasil is
its largest single customer, representing some 7 percent of its
net book value, according to the lessor's financial disclosures.
    Avianca Brasil is separate from the better-known Avianca
Holdings SA  AVT_p.CN , which is based in Colombia. But they
share the same owner, a family company owned in part by
Bolivian-born airline entrepreneur German Efromovich. 
    United Continental Holdings  UAL.O  gave the family company
a $500 million loan last November. 
    Neither party has revealed why the loan was needed, but
Efromovich has been sued for failure to repay his debts in the
United States and Brazil in recent years. 
($1 = 3.7138 reais)

 (Reporting by Marcelo Rochabrun
Editing by Phil Berlowitz)
 ((marcelo.rochabrun@thomsonreuters.com; +55 11 5644 7768;))
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