Avianca has appointed Roberto Kriete as its new chairman, formally ousting its majority shareholder German Efromovich from the airline's board.

The Colombian airline's shareholders voted unanimously in an extraordinary meeting held via telephone conference today to appoint Kriete to head the board, says the Star Alliance carrier. Renato Covelo, who was appointed interim chief executive following the departure of Hernan Rincon in April, will remain in the position.

In a conference call, Covelo says the airline's strategic priorities remain unchanged. The airline will continue with its ongoing transformation plan to improve profitability, he adds.

Kriete, the former chief executive of Central American airline TACA before it merged with Avianca in 2010, is the owner of Avianca's second largest shareholder Kingsland Holdings. He is also a founder and board director of Mexico's Volaris.

Kingsland says in a statement that it will continue working to ensure the success and stability of Avianca. Efromovich's Synergy will remain the majority shareholder of Avianca. Synergy owns the majority stake in the airline through its subsidiary BRW Aviation.

However, Efromovich and his brother Jose Efromovich have been removed from the board, says Covelo. Other board members that were removed include former Airbus Latin America president Rafael Alonso, he adds.

The airline has appointed several new directors to its board, including former Avianca chief executives Fabio Villegas and Juan Emilio Posada.

The appointment of Kriete is a further blow to Efromovich, whose businesses are mired in financial difficulties. His wholly-owned Sao Paulo-based airline, Avianca Brazil, was grounded by Brazil's civil aviation authority today.

Earlier today, United disclosed that it had granted Kingsland the authority to manage Efromovich's BRW Aviation, which had defaulted on a $456 million loan from United made in November 2018. The loan is secured by BRW's shares in Avianca.

United says it and Kingsland are committed to offer up to $250 million in financing to Avianca, whose credit ratings and share price have suffered in the wake of Efromovich's financial troubles. The Chicago-based carrier says Avianca will remain independent, pointing to its labour agreements that will require union approval for a takeover of another carrier.

The ouster of Efromovich marks a dramatic end to a shareholder tussle between him and Kriete that began in 2017. Kriete's Kingsland had sued Synergy and Avianca, alleging that the carrier's majority shareholder chose United as a joint venture partner for its sole benefit, despite better offers from other airlines.

Lawsuits from that dispute were eventually settled by Avianca, Synergy and Kingsland.

Avianca remains in the process of forming a three-way joint venture with United and Panama's Copa Airlines.

Source: Cirium Dashboard