Avianca Set for ADS Debut

Avianca is scheduled to price today the equity follow-on marking the debut of the ADS representing preferred shares of the Avianca Holdings entity. The transaction is offering 12.5m primary ADS and 14.7m secondary ADS at $17.00-$20.00 each, meaning a $579m sale at the midpoint if a 15% all-secondary greenshoe is included. Each ADS represents eight Avianca Holdings preferred shares. The preferred shares were last seen trading at COP4,265 ($2.43) each, according to the Colombian Bolsa, or what would be $19.44 per ADS – though people following the sale expect it to price at a discount to the domestic shares’ level. The secondary portion is to be sold by former Taca executives Juaquin Palomo and Alfredo Ratti and the entities representing the controlling Eframovich brothers and Kriete family. The Eframovich brothers should control a position equal to 78% of the common stock following the deal. The Panama-domiciled Colombia-listed holdco is raising funds to modernize the Avianca-Taca fleet. JPMorgan and Citi are leading the transaction, joined by UBS, BTG Pactual and Deustche Bank. Avianca and Taca merged in 2010, and the domestic IPO of the preferred shares raised $283m-equivalent in 2011. The environment for Airline equity deals has been mixed, with Brazilian Azul electing to wait until next year for an IPO. Mexico’s Volaris has traded up more than 11% through Monday since a September IPO that came at the bottom of the range.