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United Continental Holdings Inc. is seeking to oust Avianca Holdings SA’s chairman and largest shareholder, just six months after the two airlines agreed to form a joint venture.
The U.S. carrier took legal action Friday in Bogotá on a defaulted $456 million loan it made to Avianca Chairman German Efromovich as part of the proposed partnership. United is looking to secure Efromovich’s 51.5 percent stake in Avianca, which was collateral for the loan.
United’s filing sets up a battle for control of Latin America’s second-biggest airline. The Bogota-based carrier careened into crisis last month when its chief executive officer resigned and the airline revealed the loan breach by Efromovich’s BRW Aviation, the company through which the chairman holds his Avianca shares.
One complication for United: The company’s contract with its pilots gives the labor group veto power over any airline acquisition. But United plans to hand control of Avianca to Kingsland Holdings, the Colombian carrier’s second-largest shareholder, said people familiar with the matter.
“While Avianca will remain an independent company and continue to run their own airline, United strongly supports their company-wide focus on transformation,” the Chicago-based carrier said in a statement.
Avianca’s American depositary receipts surged 9.4 percent to $3.37 at 11:19 a.m. in New York. United fell less than 1 percent to $80.47.
©2019 Bloomberg L.P.