Colombia: Stock seizure throws wrench in merger plans for Avianca

A São Paulo judge has confiscated 207.5 million shares of Oceanair Linhas Aereas SA, which operates as Avianca Brasil, owned by colombian businessman José Efromovich. The ruling could complicate the family’s efforts to form an alliance with United Continental Holdings Inc. and merge Avianca Holdings S.A. with the Brazilian airline.

The judge confiscated the assets as a precautionary measure to guarantee the payment of more than 200 million reais (US$61.5 million) to two insurance companies, according to a decision published in the official newspaper of the state of São Paulo.

The trial involves Estaleiro Ilha SA, a shipyard based in Rio de Janeiro controlled by Germán Efromovich, José’s brother, who stopped operating and stopped payments to its 3,200 workers in 2014, amid a general crisis in the energy sector.

For its part, Kingsland Holdings, Avianca Holdings’ second-largest shareholder, sued the airline, the Efromovich brothers and United Continental in a New York state court in February, alleging they secretly negotiated an US$800 million loan and a strategic partnership deal.

Full Content: El Tiempo

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