The main shareholders of the Colombian airline Avianca and the controlling shareholder of the Brazilian GOL signed an agreement to create an air transport group in Latin America under a holding company structure called Abra Group Limited (“Abra Group”).
This agreement is subject to the usual regulatory approvals and closing conditions, the Abra Group would control Avianca and GOL, bringing these brands closer together within the same holding company.
“Through the recent investments made by the shareholders of Avianca and Viva, the Group would also have 100% of the economic rights of Viva’s operations in Colombia and Peru, but would not control it, and would have a convertible credit in a investment representing a minority interest in the Sky Airline airline From Chile”says the document.
In this sense, Abra will provide a platform that will allow operating airlines to further reduce their costs, achieve greater economies of scale, continue operating a fleet of state-of-the-art aircraft and expand their routes, services, product offerings and loyalty programs. .
On the whole, the airlines that will be part of the Abra Group could offer their customers the widest and most complementary network of routes with minimal overlap between markets. In addition, its financial solidity will provide participating airlines with stability and agility in the long term, thus promoting constant and sustained investment in innovation and synergies.
It should be mentioned, that Grupo Abra will be co-controlled by the main shareholders of Avianca and the majority shareholder of GOLand the management team will be led by:
- Roberto Kriete, who will serve as Chairman of the Group’s Board of Directors, was the one who made TACA the leading airline in Central America in the 1980s, before merging with Avianca in 2009. He also founded, in 2006 , Volaris, the leading airline in the Mexican market.
- Constantino de Oliveira Junior, who will serve as the Group’s CEO, pioneered the low-cost airline revolution in Latin America when he founded GOL Airlines in 2001. Along with the acquisition of VRG in 2007 and Webjet in 2011, he led the growth of the company until reaching a leadership position in the market.
- Adrian Neuhauser, current President and CEO of Avianca, and Richard Lark, current CFO of GOL, will serve as co-presidents of the Group and will maintain their current positions in the airlines. Further details on Abra’s management team will be released upon closing of the deal.
Transaction Terms
The Abra Group is a closely held company incorporated in the United Kingdom. Once the transaction is closed, the Abra Group will control Avianca and GOL and, as a consequence, it will also have non-controlling economic rights in Viva’s operations in Colombia and Peru, and would have a convertible credit in an investment representing a minority interest. in the airline Sky Airline of Chile.
Certain financial investors have committed to invest more than US$350 million in Abra shares at the closing of the transaction, further strengthening Abra’s balance sheet and liquidity position.
Closing of the transaction is expected to be completed in the second half of 2022, subject to the satisfaction of customary closing conditions and regulatory conditions.
