On Friday, February 10, Viva Air announced that it has initiated the Business Recovery Process (PRE) within the framework of decree 560/2020, which grants special protections to companies financially affected by the COVID-19 pandemic.
Through a statement, the company indicated that “This determination is given due to the crisis faced by adding to the effects of covid 19, the current macroeconomic factors that are publicly known. ”
“Additionally, the company has not been able to access capital during the last nine months since it has not yet been possible to implement its integration with another airline, which is still pending authorization by the National Government,” the company adds, in direct allusion to the integration process with Avianca, pending definition by the Colombian aeronautical authority.
The PRE gives Viva Air 90 days to reorganize its debts and establish operating and cash flow conditions that will allow it to maintain operations.
Viva Air adds that the decision to declare itself insolvent “comes after six months of waiting for the definition of the alliance with Avianca, which if approved would allow us to continue in the low cost business through our link to another group of airlines with weight in the region, with which we want to ensure the preservation of jobs, and reinforce our commitment to generate higher levels of connectivity in the country at low cost on the basis of obtaining the required capital injection.”
A few days ago, JetSMART confirmed its intention to acquire 100% of Viva’s shares, a move that Avianca described as “unfeasible” and a “diversionary maneuver”, while ratifying its will to integrate the low-cost carrier to its regular operations.
This is a developing story.
