Avianca Brasil Said to Target Sale of 20% Stake for $150 Million

  • Airline hired UBS as adviser on potential deal, a person said
  • Brazilian carrier joins Avianca Holdings in quest for partner

Avianca Brasil, one of the airlines controlled by Jose and German Efromovich, is seeking to sell an ownership stake of as much as 20 percent for more than $150 million, said a person with direct knowledge of the matter.

The carrier hired UBS Group AG to advise on the potential transaction and the sale process has started, said the person, who asked not to be identified because the discussions are private.

A deal would give the winning bidder access to Avianca Brasil’s new fleet of 41 Airbus Group SE aircraft focused on serving business travelers. The airline was the only domestic carrier to increase revenue for each seat flown a kilometer this year, with the key industry gauge gaining almost 21 percent in the year through July, according to the most recent data by the country’s civil aviation agency. Avianca Brasil has 11 percent of the Brazilian market.

The airline and Colombia’s Avianca Holdings SA, both of which are controlled by the Efromovich brothers, are seeking separate international partners while maintaining a long-term goal of merging, Jose Efromovich said in an interview Sept. 21. He declined to identify who is advising the holding company that owns Avianca Brasil or provide any other details of the negotiations. He said Avianca Holdings hired Bank of America Corp. as an adviser.

United Continental Holdings Inc., Delta Air Lines Inc. and Copa Airlines SA made non-binding offers for the Colombian carrier earlier this year, Bloomberg News reported Sept. 14. There’s no guarantee a deal will be done for either Avianca airline.

United, which owns a minority stake in Azul Linhas Aereas Brasileiras SA, said it wouldn’t discuss “rumors or speculation.” Delta, which has a stake in Brazilian carrier Gol Linhas Aereas Inteligentes SA, declined to comment, as did Avianca Brasil and UBS. Copa didn’t respond to requests for comment.

Avianca Brasil posted a loss of 906.6 million reais ($282 million) in 2015, according to data compiled by the civil aviation agency. That was at least the fifth consecutive annual loss posted by the airline.

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