BOGOTA, Feb 11 (Reuters) – Low-cost Colombian airline Viva Air has voluntarily began a neighborhood debt restructuring course of, the corporate mentioned late on Friday, because it awaits authorization of its merger with Avianca (AVT_p.CN) airways.
Viva Air mentioned in a press release that it made the choice to begin the Enterprise Restoration Course of (identified by the Spanish acronym PRE) as a result of challenges from the present financial local weather and from the influence of the COVID-19 pandemic.
“The corporate has not been in a position to entry capital over the past 9 months because it has not but been in a position to finalize its merger with one other airline, which remains to be pending authorization from the Nationwide Authorities,” the airline mentioned.
“Viva accepts this voluntary restoration course of that lasts 90 days, with a view to restructure its money owed by way of negotiation with its primary collectors to proceed working beneath sustainable circumstances,” it added.
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The airline mentioned it entered the method after a lot consideration, because it awaits a call on the Avianca merger. Its monetary state of affairs has been aggravated by the rise in gas costs final yr and the devaluation of the Colombian peso.
The announcement got here after ultra-low-cost airline JetSMART Airways additionally introduced its intention to purchase 100% of Viva Air.
Colombia’s Civil Aeronautics group objected in November to a merger between Avianca and Viva, arguing that it represented an anticompetition threat.
The airways filed an attraction and in January the aviation governing physique annulled the merger course of citing procedural irregularities, and restarted it.
Viva, which has operations in Colombia and Peru, has a fleet of 23 plane and a few 1,000 direct workers.
Reporting by Luis Jaime Acosta in Bogota
Writing by Isabel Woodford
Modifying by Matthew Lewis
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