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The Colombian Government studies saving Avianca with a loan | Economy

An Avianca plane at the El Dorado airport in Bogotá.JUAN BARRETO / AFP

Avianca’s turmoil comes from afar, but after restructuring its debt in 2019, the company put its next steps on black Sunday by announcing that it is voluntarily accepting the United States bankruptcy law. Its purpose is to try to mitigate the devastating effects of the coronavirus health emergency on air transport, so it resorted to this formula that seeks to reorder its balance sheet and “protect and preserve operations”. The oldest airline in America and one of the main on the continent, which turned a century ago last year, is a symbol of Colombia. In this case, the blow caused by the crisis of the covid-19 goes beyond the gloomy panorama of the sector and the Iván Duque government is considering guaranteeing its viability through a loan that has not yet been defined.

The debate over the rescue or public rescue of Avianca, which closed the previous year with losses of $ 894 million, has been stirring for weeks an intense political discussion in which accusations of favoritism have even been addressed to the Executive. This Monday, the Minister of Finance, Alberto Carrasquilla, suggested that the decision has already been made in some way and that the authorities are evaluating the best option. It would be a relationship in which the State would enter as a lender. “We are currently observing. The way to put the money in is to guarantee that this money, which at the end of the day belongs to the taxpayers, is used in order to protect our air communication,” the minister said in statements to the station. Blu Radio. In any case, the link would not go any further and would not affect the property or the structures of the shareholders. “The Government would enter into the condition of a lender. It is difficult to predict, but the entry as a shareholder is something that would be extremely delicate, I do not think that this is a solution that we should put first on the table, “he added.

Until now, Duque’s team had considered a sort of “sectoral approach” in a country with uneven and complex geography and an infrastructure plan that in the past was threatened by the armed conflict between the State and the FARC. “Colombia has been a country, with its history of previous violence, where air connectivity was essential,” the Minister of Commerce, Industry and Tourism, José Manuel Restrepo, told EL PAÍS last week. “We have said that this is a strategic sector and we want to support it. Liquidity, solvency, credit, and credit guarantee lines have been defined. Measures associated with extending deadlines for paying taxes, contributions, reducing the burden on pension contributions, and eventually there could be a line that allows access to resources from the financial system with the guarantee of the State, as has been done with small and medium-sized companies. Until there we go ”, he affirmed. This last formula is, at the moment, the one chosen for an injection of liquidity.

Air traffic in Colombia has been paralyzed for about a month and a half and will resume gradually once the emergency subsides. The mayor of Bogotá, Claudia López, criticized in late April the possibility of a public rescue of the company. “Respectfully. Small and medium-sized companies are the economic heart of Bogotá and Colombia. They employ 60% of our people. They haven’t even helped them pay their payroll any less to save them. And the priority that is being discussed is to save Avianca, a foreign company? ”He said then.

The leader of the green alliance was referring to an operation, closed a year ago, in which United Airlines intervened in the distribution of power of the company by taking control of its actions from the majority partner, Germán Efromovich, and handing it over to Kingsland, “An independent third party”. The decision was due to a non-payment by the shareholder to the US airline and a new meeting came out of it. The current president of Avianca Holdings, Anko van der Werff, indicated that filing for Chapter 11 bankruptcy law in the United States was “a necessary step.” “When the restrictions imposed by governments for air travel are lifted and we can gradually resume our passenger flights, we hope to contribute to the revival of the economy in Colombia and in our other markets,” he added in a statement.

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