Government will participate in the restructuring of Avianca with up to US$370 million.

The Colombian Government has announced its participation in the restructuring process of Avianca that is being carried out in the United States; this is because they seek to “guarantee the provision of service, the air connectivity of Colombians and general economic activity,” they specify.

This is a credit of up to US$370 million in an 18-month transaction that corresponds to the estimated duration of the airline’s restructuring process.

“The Comité́ administration committee of the Emergency Mitigation Fund (FOME), within the framework of the policy to guarantee the protection of air service provision, authorized in its session today the participation of the Nation in the restructuring of Avianca, by means of financing up to US$370 million within the process that the company is following under Chapter 11 of the United States Bankruptcy Code,” specified the Administration Committee of the National Government’s Mitigation Fund in which it communicated the government’s decision.

Although the government has expressed its interest in the participation, the decision must be evaluated and authorized by the judge in charge of the case in the court of the Southern District of New York.

“The benefits to Colombia and its economy of allowing Avianca to advance its restructuring and maintain its operation in the country are significant. The effect on Avianca’s operation would have negative repercussions on the quality of air service, on the economy and on the country’s competitiveness,” the Government points out.

Avianca contributes approximately 500 thousand direct and indirect jobs and its operation represents approximately $14.6 billion pesos per year for the Colombian economy (approximately 1.4% of the GDP).

By Margarita Coneo Rincón – La República