Avianca appeals order that blocked $370 million emergency loan

SAO PAULO, Sept 15 (Reuters) - Avianca Holdings on Tuesday said it had appealed a court order that last week banned Colombia’s government from providing the troubled airline with a $370 million loan to finance part of its bankruptcy restructuring.

The airline, which filed for bankruptcy in May due to the coronavirus pandemic’s effect on travel, said that without the loan, keeping the company afloat would become “untenable.”

The loan is part of a $2 billion financing package that is key to the carrier exiting bankruptcy protection. The Colombian government’s slice of the package had been questioned in a Colombian court under the argument that Avianca’s guarantees on the loan were insufficient.

Last week, Avianca rival, LATAM Airlines Group also faced a setback in its own bankruptcy process when a U.S. judge turned down a $2.4 billion financing package because it considered it to be too advantageous to the carrier’s major shareholders. (Reporting by Marcelo Rochabrun; Editing by Aurora Ellis)