A last-minute bid by Avianca's pilots to win control of the bankrupt carrier failed as the airline left its 21-month stay in US Chapter 11 reorganisation with a new Brazilian owner.
Salvador Frieri, a Colombian businessman who lives in Italy, agreed to back the pilots' union with an offer designed to match the $63 million bid from Brazil's Sinergy Group that creditors had already accepted. Sinergy now has a 75% stake in the carrier, with the Association of Colombian Coffee Growers cutting its shareholding from 50% to 25%.
The pilots' bid was too little too late to derail the momentum already behind Sinergy. Not only had the creditors' committee already accepted its plan, but the court had given its preliminary blessings in mid-November. The Sinergy deal also contained penalties of $1.5 million and up to $150,000 in expenses if Avianca decided to opt out.
Recognising that time was short, the pilots agreed to tailor the terms of their offer to match those of Sinergy's, so that the only document revisions required would be a change in names. That itself made their bid less attractive to some creditors, who could see little benefit in switching equity investors at the last minute for no better terms.
The ultimate trade-off was expected to weigh the advantages of linking Avianca to the Sinergy Group, a strong petroleum-based conglomerate with a small but growing regional airline of its own in Brazil's OceanAir, versus the prospect of labour peace by addressing the concerns of Avianca's 500 pilots. They have vigorously opposed Sinergy because it refused to include their pensions on a list of $220 million in Avianca debts that it would assume.
The airline's shareholders appeared to be confident of the outcome: they decided at a special early December meeting, before final action on the pilots' bid, to appoint to their board of directors German Efromovich, Sinergy's founder.
DAVID KNIBB SEATTLE
Source: Airline Business
