Viva’s main investor Castlesouth prioritises Avianca deal over JetSMART’s offer

The board of directores of Castlesouth Limited, controlling shareholder of Fast Colombia S.A.S., Viva’s corporate name, announced this afternoon its position regarding JetSMART’s interest in acquiring 100% of the Colombian airline, in favour of the transaction already advanced with Avianca considering Viva’s critical situation and the time it would take to start a new process with the ultra low-cost Indigo partners.

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See also: JetSMART wants to buy Viva

«To date, JetSmart has not provided Castlesouth Limited with any offer. Additionally, JetSmart has requested extensive due diligence information from Viva,» the company said in a statement, emphasising that negotiations with both JetSMART and another company «would likely take significant time without any certainty that a transaction could be agreed upon and, even if agreed, would then be subject to further regulatory approval delays».

«Given Viva’s current critical financial condition, immediate approval by the National Government to integrate Viva with Avianca is in the best interests of Viva and its passengers, creditors, employees and other interested parties, including the Colombian public,» they concluded.

On Friday 10 February, Viva Air announced that it had initiated the Business Recovery Process (PRE) under decree 560/2020, which grants special protections to companies financially affected by the COVID-19 pandemic.

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«The company has not been able to access capital for the last nine months as it has not yet been possible to implement its integration with another airline, which is still pending authorisation from the national government,» Viva said that day.

The ERP gives Viva 90 days to reorganise its debts and establish operational and cash flow conditions that will allow it to maintain operations.