BANKRUPTCY COURT APPROVES AVIANCA’S DISLOSURE
STATEMENT, SOLICITATION OF VOTES AND APPLICABLE PROCEDURES AND
EQUITY CONVERSION AND COMMITMENT AGREEMENT
Further to Avianca Holdings S.A.’s (“Avianca” or the
“Company”) disclosure to the market on August 11, 2021,
in the context of the Company’s Chapter 11 proceedings, Avianca
discloses that the Bankruptcy Court for the Southern District of
New York (the “Bankruptcy Court”) has approved a disclosure
statement (the “Disclosure Statement”) for Avianca’s (and
its affiliated debtors in the Chapter 11 proceedings (the
“Debtors”)) proposed plan of reorganization (the
“Plan”), a significant step for the Company towards
emergence from Chapter 11.
The Bankruptcy Court has authorized Avianca to distribute the
Disclosure Statement and solicit votes on the Plan from certain
classes of creditors. The Bankruptcy Court also set a hearing to
consider approval of the Plan for October 26, 2021 at 10 a.m.
(Eastern Time) (the “Confirmation Hearing”).
The deadline to submit votes in respect of the Plan will be
October 14, 2021 at 4 p.m. (Eastern Time) and the deadline to
object to the Plan will be on October 19, 2021 at 4 p.m.
The next step in the Chapter 11 process will be the solicitation of
votes in respect of the Company’s Plan, as disclosed above.
Additionally, during today’s hearing the Bankruptcy Court also
approved, among other items, the terms of, and the Company’s entry
into and performance under, the Equity Conversion and Commitment
Agreement, dated September 1, 2021, by and among the Company,
certain of its subsidiaries, and each of Avianca’s “Tranche B”
Lenders under the Company’s outstanding DIP Credit Agreement
described in Avianca’s September 1, 2021 public filings on
Further to Avianca’s disclosures to the market on May 20,
2020, April 14, 2021, July 22, 2021 and September 1,
2021, the Company reiterates that once the creditors approve the
Plan and subject to the subsequent confirmation of the Plan by the
Bankruptcy Court on terms consistent with the ECCA, the Company’s
shareholders (including ordinary shareholders and preferred
shareholders) will not receive any distribution. As a result of the
foregoing, under the Plan, the value of the outstanding shares of
the Company is expected to be reduced to zero, due to the decrease
in equity of the Company attributable to the Debtors’ liabilities
to third parties and creditors, as well as the capital injection by
new investors as contemplated by the Plan and the ECCA.
Avianca has included statements in this press release that
constitute “forward-looking statements”. As a general matter,
forward-looking statements are those focused on future or
anticipated events or trends, expectations and beliefs, including,
among other things, the Company’s expectations with respect to its
Chapter 11 proceedings, the airline industry and the further
impacts of the COVID-19
pandemic. Such statements are intended to be identified by words
such as “believe,” “expect,” “intend,” “estimate,” “anticipate,”
“will,” “project,” “plan” and similar expressions in connection
with any discussion of future operating or financial performance.
Any forward-looking statements are and will be based upon the
Company’s then-current expectations, estimates and assumptions
regarding future events and are applicable only as of the dates of
such statements. Readers are cautioned not to put undue reliance on
such forward-looking statements.
Forward-looking statements in this press release are not guarantees
of future performance and involve risks and uncertainties,
including with respect to the Chapter 11 process, related
negotiations and hearings before the Bankruptcy Court, as well as
the COVID-19 crisis. Actual
results may differ materially from those projected in this press
release for numerous reasons, including factors outside of the
Company’s control. The Company expressly disclaims any obligation
to update or revise this press release, including any
forward-looking statements, whether as a result of new information,
future events or otherwise.