Avianca Holdings, United Airlines And Kingsland Holdings Agree To Terms For Loan To Be Provided To Avianca

BOGOTÁ, Colombia, Oct. 7, 2019 /PRNewswire/ -- Avianca Holdings has reached agreement with United Airlines and Kingsland Holdings S.A. regarding the terms of United and Kingsland's proposed financing to AVH of up to US$250 million, and established the conditions precedent to the transaction.

United and Kingsland have agreed to provide Avianca a four-year loan at an interest rate of 3%; interest will be paid-in-kind until maturity, granting Avianca greater financial flexibility. The loan will convert into shares at Avianca's option –at an equivalent price per share of US$ 4.6217, representing a 35% premium over the 90-day weighted average price through October 3, 2019– subject to certain conditions, including AVH's share price consistently trading above seven dollars; the loan may also be converted into shares voluntarily at the discretion of United Airlines and Kingsland Holdings. The financing will be secured by a pledge of stock in AVH's major subsidiaries.

Drafting of final documentation is ongoing and is expected to be executed by mid-October. Funding remains subject to certain other conditions, including the successful conclusion of Avianca's debt reprofiling plan in a manner consistent with the Avianca 2021 plan, as well as the closing of the company's exchange offer for its US$550 million 2020 bond.

"United congratulates Avianca Holdings on this important step in its Avianca 2021 plan. We look forward to Avianca's successful achievement of agreements with its other stakeholders, and to working together with Avianca to complete final documentation for our loan," said John Gebo, United's senior vice president of Alliances.

"We are extremely pleased to have reached agreement with Avianca Holdings on the terms of this facility," said Roberto Kriete, Chairman of Kingsland Holdings. "We look forward to the successful conclusion of the company's debt reprofiling initiative, and to working with management to support the success of the Avianca 2021 plan."

The CFO of Avianca Holdings S.A., Adrian Neuhauser stated: "This agreement represents another crucial step in the financial execution of our Avianca 2021 plan, building on the success we have achieved to date in the bond exchange offer. We believe the terms we have agreed to are very attractive, and we are grateful for the confidence United and Kingsland continue to place in the company and its management."

Avianca continues to work on quickly finalizing negotiations with its creditors and fulfilling the conditions necessary to conclude the bond exchange offer, in order to expeditiously close the stakeholder loan.

Once this process is concluded, Avianca expects to offer its preferred shareholders the opportunity to participate in US$125 million financing under similar conditions.

About Avianca Holdings

Avianca is the commercial brand that identifies the passenger, cargo transportation airlines and on ground services integrated in the Company with a team of more than 21,000 employees. The terms "Avianca Holdings" or "the Company" refer to the consolidated entity. The original source-language text of this announcement is the official, authoritative version, Translations are provided as an accommodation only, and should be cross-referenced with the source-language text, which is the only version of the text intended to have legal effect.

About Kingsland

Kingsland Holdings Limited is a shareholder of Avianca Holdings with 40 years of aviation experience. Kingsland is chaired by Roberto Kriete, who has been a member of the Board of Directors of Avianca Holdings S.A. since 2010. He was the founder of Volaris, pioneer of TACA and president of the Latin American Air Transport Association.

SOURCE Avianca Holdings S.A.

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