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Avensa adrift

Avensa faces few options after fellow Venezuelan carrier Aserca dropped its joint venture plans and a government commission has decided not to come to the rescue.

Even if Avensa's shareholders come up with a restructuring plan, the government will contribute only proportionate to its 20% stake. Barring that, Venezuela's judge advocate general has declared that Avensa must surrender all accounts to administrators, effectively putting the airline in bankruptcy. The order sets no deadline, but requires shareholders to act "as rapidly as possible".

Avensa's joint venture with Aserca collapsed after the International Air Transport Association (IATA) suspended Avensa from its ticket clearing house due to nonpayment. Since that made Avensa tickets non-endorsable, Aserca bowed out.

In an effort to reduce its $52 million in mostly short term debts, Avensa is trying to sell assets such as its offices in Caracas, and convince the government and a major bank to capitalise debts. The only alternative may be to go cap-in-hand to Aeropostal and see if it is willing to make a second bid to buy the airline. The earlier offer was to buy 80% of Avensa for $20 million. That would have turned Avensa into an Aeropostal subsidiary.

Wilmer Castro, the government's appointee as Avensa's president, rejected Aeropostal's offer, but that was when Avensa still was looking forward to a viable joint venture with Aserca.

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