The company is requesting auction of a new Isolated Production Unit, which includes rights of flight on the Rio-Sao Paulo air bridge, for a minimum value of US $145 million
Brazilian airline Azul said Monday it has filed a new proposal in court seeking to buy part of Avianca Brasil’s operations, which is under judicial reorganization and faces difficulties to maintain its activities in the country.
In a statement to the market, Azul said that he applied to the 1st Bankruptcy Court and Judicial Recovery of Sao Paulo, where the processes the judicial recovery, authorization to “carry out a competitive process aimed at the judicial alienation of a new Isolated Productive Unit (UPI)” for a minimum amount of US $145 million (equivalent to R $580 million).
In practice, the order represents a return of Azul in the dispute for Avianca Brazil, with an offer superior to that presented initially. On March, the company made a $ 105 million bid to buy part of Avianca Brazil’s operations, but in April announced its withdrawal, accusing Gol and Latam of acting to avoid competition from the Sao Paulo-Rio de Janeiro most coveted country.
According to Azul, the proposal for a new Isolated Production Unit would include “certain arrival and departure times operated by Avianca Brasil, including those of the Rio-SP Aerial Bridge” and “does not invalidate the judicial alienation procedure of the 7 isolated productive units”, in form of the auction established in the judicial recovery plan approved by the creditors. UPI is a kind of company that would be created from the company’s dismemberment.
The Avianca Brasil auction would take place on May 7 but was suspended by decision of the São Paulo Court of Justice, in response to a request made by Swissport Brasil, which operates with airport logistics services.
“In Azul’s view, the judicial alienation of the New UPI offers a comprehensive, viable and truly deployable alternative, including from an operational, regulatory and competitive point of view,” the company said in a statement.
According to Azul, the new proposal “gives Avianca Brasil, its employees, consumers, creditors, and other interested parties a legal and legitimate alternative to enable monetization, continued use of assets and preservation of activities that currently run a serious risk of paralysis.”
“In addition, the New UPI offers a real alternative to increase competitiveness in the air bridge between Rio-SP,” added the statement from Azul.
Azul’s request is still subject to the analysis of the 1st Court of Bankruptcy and Judicial Recovery of Sao Paulo.