Avianca: United May Ultimately Acquire This Colombian Airline

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About: Avianca Holdings S.A. (AVH), Includes: UAL
by: Ben Holden-Crowther
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Ben Holden-Crowther
Value, long-term horizon, Long Only, foreign companies
Summary

Avianca, Colombia's flag carrying airline and the second largest operator in South America is in a complicated position as a result of its controlling shareholder defaulting on a loan.

If enforcement action is taken in relation to this loan default, the company's controlling shareholder would likely end up being United Continental Holdings.

Avianca's currently depressed share price seems to present an opportunity for prospective investors to acquire a stake in the company for considerably less than its fair value.

Investment Thesis

Avianca (AVH) is Colombia's largest airline, with a 54% market share of the domestic market and an increasing share of international flights to and from a range of destinations across South