Avianca shareholder seeks to block United Airlines strategic alliance
Saturday, 01 Mar, 2017
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United Airline’s planned stake purchase and strategic alliance with Avianca may not get off the ground.
Avianca Holdings’ second biggest shareholder is seeking to block the deal as it only benefits the personal interests of main shareholder German Efromovich, according to a Bloomberg report.
Group chairman Efromovich controls about 78% of shares, and is forcing the airline into a deal which will hurt minority investors.
Shareholder Kingsland Holdings filed a lawsuit in New York State to stop the United deal as very little of United’s proposed investment will benefit the airline.
Kingsland claims Efromovich ignored two other competing offers which placed a greater value on Avianca.
"The United transaction diverts the vast majority of the consideration United is paying for a partnership with Avianca — a valuable asset that may provide United with an estimated annual profit in excess of $75 million — to Efromovich’s financially shaky affiliates," the lawsuit said.
"He torpedoed the strategic process by clandestinely negotiating a transaction with United."
Kingsland says Avianca negotiated a $800 million loan and strategic partnership with United but only about $200 million may eventually go to Avianca.
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Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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