1/31/2017 - Avianca to pursue proposed strategic alliance with United and receives Synergy’s capitalization prop

Avianca reaffirms its continuing commitment to pursue its previously announced process to enter into a strategic alliance with a world-class global partner. Taking into account all proposals received and Avianca’s long-term interests, Avianca intends to pursue a long-term strategic-commercial alliance with United Airlines whose terms are yet to be negotiated. Avianca believes that such an alliance would provide important growth opportunities, synergies and economies of scale for both companies. Both Avianca and United are members of Star Alliance, a global airline alliance which provides service to 192 countries via 28 member airlines.

Also today the Board of Directors of Avianca was informed by Synergy Aerospace Corp (Synergy), in its capacity as controlling shareholder, of Synergy’s intention to make a capital contribution to Avianca of up to USD 200 million. Synergy has advised Avianca that Synergy intends that all of Avianca’s shareholders, including its preferred shareholders, should have the opportunity to participate in such capitalization on a pro-rata basis. The proposed capitalization would be subject to all necessary corporate and regulatory approvals.

Avianca’s Board of Directors have authorized Avianca to implement all necessary analysis and other steps required in connection with the proposed strategic-commercial alliance with United Airlines and capitalization of Avianca.

Synergy also informed Avianca of its intention to seek all necessary approvals for the eventual combination of Avianca with Oceanair (Avianca Brasil), a Brazilian
airline controlled by Synergy, on fair and reasonable terms for both companies.

“Avianca’s improved quarterly operating metrics which were recently published, coupled with the proposed capitalization and long-term strategic-commercial alliance with a world-class international airline, all reflect execution of Avianca’s strategy and set the stage for its success in years to come” says Hernan Rincón, CEO of Avianca.