ARC NEWS
Avianca looks to raise $1.8 billion of exit financing
April 15, 2021
Avianca is planning to raise $1.8 billion of exit financing ahead of its anticipated emergence from Chapter 11 bankruptcy protection later this year. The Colombian carrier says in a regulatory filing that it plans to raise $1.8 billion of debt and equity to refinance $1.4 billion of Tranche B debtor-in-possession (DIP) financing obligations, and to provide $400 million of incremental liquidity to meet its target of $1 billion of exit liquidity. "Prior to initiating a competitive process to determine the availability of more attractive equity funding, Avianca is working to negotiate the final terms and conditions for its option to convert $902 million Tranche B DIP obligations into equity," states the airline. "The terms of the exit financing will be determined through mutual agreements between Avianca and the parties whose terms best meet the objectives of the company." The financing will also be subject to approval from the US Bankruptcy Court for the Southern District of New York, which is overseeing Avianca's Chapter 11 process. The carrier points out that, at this stage, it is not possible to know the full extent of its liabilities, or whether third parties, creditors or shareholders will contribute new capital. It also remains uncertain whether the value of Avianca's shares will be diluted, or if the company will be liquidated. "As a result of the foregoing, under the Chapter 11 plan, the shareholders of the company may be diluted, or the value of their shares reduced to zero, due to the decrease in equity of the company attributable to the companies' liabilities to third parties or creditors, as well as the injection of capital by new investors pursuant to the Chapter 11 plan," says Avianca.
The airline notes that it is "well along" in its fleet simplification and cost-reduction programme, which it expects will result in a reduction of more than $2 billion in aircraft debt and leasing obligations during the period from March 2020 to 31 December 2022. It expects its leverage measured as net debt to adjusted EBITBA to drop from 5.8x as of 31 December 2019 to below 3x by the end of 2023. Avianca has retained Seabury Securities as financial and restructuring advisor to raise its exit financing.


Swiss to trial IATA Travel Pass on London flights
April 15, 2021
Swiss will roll out IATA's Travel Pass on its Zurich-London Heathrow route from 22 April, becoming the first Lufthansa Group carrier to employ the mobile app aimed at easing travel amid the pandemic. Travellers can opt to receive their Covid-19 test results directly into the app to display their travel eligibility to airlines and other relevant authorities without divulging other personal health information, Swiss says. It also enables travellers to check Covid-19-related entry provisions at their country of destination. Swiss is additionally testing other digital solutions, including the EU Green Pass and CommonPass, and trialling a programme under which travellers can upload Covid-19 test results on the carrier’s website up to 12 hours before the trip, to check their eligibility to travel. That programme is currently tested on its flights to Spain, Portugal and US city Newark from Zurich.


Tarom to sell half of its fleet
April 14, 2021
Romanian carrier Tarom has put 14 aircraft up for sale, including all of its Airbus A318s, Boeing 737-300s and 737-700s.
In a notice on its website, Tarom says it plans to sell four A318s, four 737-300s and four 737-700s, as well as two ATR 42-500s. The airline is seeking offers for the aircraft, which are being sold in an "as-is, where-is technical condition".
Data shows that Tarom has four A318s in service. It has one 737-300 in service and three in storage, as well as three 737-700s in service plus one in storage. The airline owns a total of seven ATR 42-500 turboprops, all of which are listed as being in storage. Its fleet also includes four in-service Boeing 737-800s and four ATR 72-600s, as well as two ATR 72-500s which are listed as being in storage. Tarom has another five ATR 72-600s on order along with five Boeing 737 Max 8's. Tarom says the aircraft it is selling are available for inspection at its maintenance facility in Romania. The airline was cleared by the European Commission last year to receive nearly €37 million ($44 million) in rescue aid.


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