Avianca files for $100m IPO in USA

Washington DC
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Latin American airline group Avianca filed for an initial public offering in the USA yesterday, aiming to raise up to $100 million.

The Star Alliance carrier will use the proceeds from the sale of American depositary shares to fund its fleet modernisation, it says.

Avianca did not disclose pricing details. It is already listed on the Colombia stock exchange.

"We expect to use substantially all of the net proceeds to finance our fleet modernisation plan, including our proposed acquisition of Airbus, Boeing and ATR aircraft," says the airline. "We also expect to finance our fleet modernisation plan with a combination of cash generated from operations, bank loans, export credit agency financings, capital and operating leases and other forms of financing that may be attractive from time to time."

The carrier has entered into agreements to acquire several new aircraft. These include up to 15 Boeing 787s to be delivered between 2014 and 2019, it says in documents filed with the Securities and Exchange Commission (SEC). Avianca also has 33 current generation Airbus A320 family aircraft on order to be delivered between the second half of 2013 and 2016, 33 A320neos for delivery between 2017 and 2019, two Airbus A330 freighters to be delivered in the second half of 2013 and 15 ATR 72s for delivery between the second half of 2013 and 2015.

As of 30 June, Avianca operated a fleet of 151 aircraft.

JP Morgan Securities and Citigroup Global Markets are acting as global coordinators and joint book-running managers of the offering, and as representatives of the underwriters. The underwriters include the two institutions, Merrill Lynch, Pierce, Fenner & Smith, UBS Securities, Banco BTG Pactual - Cayman Branch and Deutsche Bank Securities.

The carrier says it will begin sales of the shares to the public "as soon as practicable" after its registration statement with the SEC becomes effective.

Avianca's holding company was incorporated in Panama in 2011 following the merger of Avianca and Taca in February 2010. The airline completed an IPO in Colombia in May 2011, selling 100 million preferred shares for Colombian pesos 500 billion ($279 million).