Colombia: Court maintains suspension of the loan to Avianca.
The Administrative Court of Cundinamarca decided not to lift the precautionary measure that is holding up the disbursement of the loan approved to Avianca by the Emergency Mitigation Fund (Fome) for US$370 million, after the airline filed an appeal against the measure ordering the suspension of that process, reported Portafolio.
“After reviewing the appeals for reinstatement filed by Avianca and the Colombian government in defense of said financing, the Court decided not to lift the precautionary measure, a decision against which Avianca has already filed an appeal,” indicated the high court.
In any case, that credit to be disbursed must be approved by the Court of New York where Avianca took advantage of Chapter 11 of the Bankruptcy Code.
Avianca’s Debtor-in-Possession (DIP) financing structure includes back-up commitments to reserve $240 million for government participation, which are not contingent upon the injunction being lifted prior to approval of the DIP by the U.S. Bankruptcy Court.
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