The New York bankruptcy court approved Avianca Holgings SA to submit its reorganization plan to creditors for a vote, bringing the airline closer to emerging from bankruptcy.
Avianca’s reorganization plan would allow creditors to exchange US$ 935 million in debt for 72% of the airline. The company will also eliminate some US$3 billion in debt.
Martin Glenn, a U.S. bankruptcy judge, said he would approve a disclosure statement to be sent to creditors in the U.S. and Colombia to decide whether to support the debt restructuring plan.
With this development, Avianca expects to emerge from bankruptcy by October 31 if it obtains court approval of the plan.
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