Avianca Holdings, United Airlines and Kingsland Holdings have finalized documentation of the stakeholder loan of up to US $ 250 million for Avianca, allowing for expeditious funding subject to successful conclusion of the conditions precedent established under the loan agreement, including, but not limited to, the finalization of the debt reprofiling negotiation with its creditors and lessors.
On November 1, 2019 Avianca already met one of the conditions precedent required with the closing of the exchange offer of its US $ 550 million Bond.
The CFO of Avianca Holdings S.A., Adrian Neuhauser stated, "We continue to work on quickly finalizing negotiations with our creditors and fulfilling the conditions necessary to conclude the debt reprofiling, in order to expeditiously close the stakeholder loan."
The loan conditions agreed to in October consist of a four-year loan, at a 3% interest rate. The interest will be capitalized until the loan expires, providing Avianca greater flexibility to manage its cash position. In addition, the loan may be converted into shares at Avianca's discretion - at an equivalent price for each of US $ 4.6217 - subject to certain conditions, if the price of the stock continuously exceeds US $ 7.00 (seven dollars), or voluntarily at the discretion of United Airlines and Kingsland Holdings. The loan will be guaranteed by the equity interests of Avianca Holdings in its main subsidiaries.
Completing these milestones allow Avianca to advance on the financial execution of its Avianca 2021 plan.