Avianca seeks bankruptcy court approval of $2 billion financing

Avianca Holdings SA, the Latin American airline that filed for Chapter 11 bankruptcy protection in May, is now seeking court approval for financing totaling about $2 billion.

The company secured commitments for the debtor-in-possession financing and has filed a motion to approve it in the U.S. Bankruptcy Court for the Southern District of New York.

“Securing these financing commitments is another concrete step forward in our Chapter 11 reorganization process,” said Anko van der Werff, chief executive officer in a statement.

The Covid-19 pandemic has devastated the global travel industry, forcing airlines to suspend flights, lay off employees and seek financial help from governments and investors. Companies such as Grupo Aeromexico SAB and Virgin Australia Holdings Ltd. have also gone into administration or sought bankruptcy protection.

Avianca, headquartered in Bogota, had said last week that if a temporary Colombian court ruling stood it would put at risk the structure of the debtor-in-possession financing plan that’s part of its Chapter 11 process.