Colombian airline Avianca plans to change its address to the UK in order to receive higher tax breaks during its Chapter 11 turnaround process.
Chapter 11 is a type of judicial recovery process in U.S. courts that allows the debtor to keep all of his or her assets, oppose creditors’ claims, defer payment terms, and reduce debt. g1 / Jusbrasil.
According to website information Simple flyingIf the move is approved by the U.S. Bankruptcy Court, the decision will create a new entity, Avianca Group International Limited.
As a Colombian-based airline, Avianca currently has its legal address in Panama, although it has air operator certification in countries such as Colombia, with the exception of El Salvador, Costa Rica and Ecuador. These certificates will not be affected if Avianka actually travels to the UK. The physics headquarters in Colombia will not be transferred to Europe, which is a financial decision.
“The proposed liquidation of the new UK Holdings is based on the terms and conditions of the Chapter 11 process approved in that region. Therefore, the new residence does not imply any change in the operation or jurisdiction of an airline,” the company said.
According to North American vehicle information Bloomberg, Colombia’s decision surprised the judge overseeing the company’s operations in the United States. This judge was dissatisfied with Avianca’s decision to change his tax address and did not disclose this fact in advance.
In addition, Avianca Group International Ltd will create new shares, allowing the company to repay its debtors and Chapter 11 funds, while the current Panama-based company Avianca Holdings will remain, but the shares will remain of no value.
Now, this new chapter in the history of the company is in the hands of an American judge who may approve or disagree with the decision.
Recently, another controversy arose with the Colombian company, following the release of information that Sky Airlines was allegedly affiliated with de Chile Avianca, which the company denied.
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