BOGOTA, Sept 12 (Reuters) - Latin American airline Avianca announced the exchange of $475.2 million in bonds on Thursday, part of a plan to change its capital structure amid ongoing financial problems and enough to receive additional financing from United Airlines.
In a statement to Colombia’s financial regulator, Avianca said it would extend the deadline for bond holders to exchange their paper until Sept. 25, in a bid to exchange a total of $550 million worth of bonds coming due next year.
Investors can exchange the bonds for others also coming due in 2020, but with a $50 bonus per $1,000.
United Airlines and Kingsland Holdings Limited, which between them control Avianca, said in a joint statement that results of the exchange thus far were sufficient for it to give the airline up to $250 million in additional financing.
“We are also pleased to confirm that this achievement is sufficient to satisfy United’s requirement for the exchange of these May 2020 bonds, regarding our previously announced offer, together with Kingsland, to loan $250 million to Avianca Holdings,” said John Gebo, senior vice president of alliances for United Airlines.
“Our loan remains contingent on certain other conditions being met by Avianca Holdings, including certain commitments and waivers made by other stakeholders,” Gebo said.
United launched a management overhaul at Avianca in May, removing top shareholder German Efromovich from controlling the cash-strapped airline. (Reporting by Nelson Bocanegra Writing by Julia Symmes Cobb; Editing by Tom Brown)