January 22, 2019 / 3:38 PM / a year ago

Avianca Brasil looks for capital, hires Galeazzi - sources

SAO PAULO, Jan 22 (Reuters) - Airline Avianca Brasil, which filed for bankruptcy protection in December, is looking for a cash injection and has hired Brazilian consulting firm Galeazzi & Associados to help it find a partner or a buyer, three sources with knowledge of the matter said.

Galeazzi’s executives are already visiting the carrier’s creditors to discuss options, one of the sources said, asking for anonymity to disclose private talks.

Avianca shareholders are discussing a potential cash injection by hedge fund Elliott Management Corp, one of the people said. Any investment now would need to happen within the bankruptcy protection process, likely in the form of debtor-in-possession financing.

Avianca, Elliott and Galeazzi did not immediately reply to requests for comment.

Any capital injection or loan would need authorization from the bankruptcy judge.

Avianca is battling its main creditors, aircraft lessors Aircastle Ltd and General Electric Co’s unit GE Capital Aviation Services, to avoid or delay the grounding of its planes.

The escalating legal battle has added to the uncertainty surrounding Avianca Brasil’s ability to maintain its current flight schedule, even as the carrier so far has successfully fended off multiple repossession attempts.

Reporting by Tatiana Bautzer Editing by Susan Thomas

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