A filing with regulatory authorities in the United States indicated Avianca Holding SA Chairman German Efremovich had pledged 19% of the company's common shares in the Colombian flag carrier as collateral for loans. One of the banks to provide the loan is Citibank Inc.
The shares come from Synergy Aerospace Corp, a privately held company that controls Avianca. No information was provided as to the amount of the loans or its term or inclusive dates.
Previously, Avianca had announced plans to spend nearly USD4 billion through 2019 to purchase more than 100 planes to address the growing demand for airline traffic in Latin America. Part of the expansion plan is to increase it debt load through the sale of seven year dollar denominated bonds totalling USD300 million.
A member of the company's press office declined to provide a comment on the report. A phone call and an email sent to Efromovich's Bogota office were not returned. Citigroup spokeswoman Natalie Marin declined to make a comment on the matter.
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