Avianca Holdings, the Latin American multinational airline holding company, filed a motion with the United States Bankruptcy Court. The company is seeking approval of the terms of, and its entry into and performance under,  debtor-in-possession-to-exit facility commitment letters, as well as its incurrence, payment, and allowance of obligations as superpriority administrative after, it outlined in a statement on July 22, 2021. 

The Chapter 11 bankruptcy code of the United States is a form of filing for bankruptcy that gives the debtor the chance to restructure its assets, liabilities, and business affairs. This form of filing is also called "reorganizational bankruptcy". However, the key for the debtor is to satisfy the obligations under the plan reorganization requirements.

Avianca Holdings filed for the United States Chapter 11 bankruptcy code in May 2020. The airline planned to raise $1.8 billion to repay debt and provide new financing as they were processing their exit from the bankruptcy reorganization in April 2021. They had cited that the pandemic-driven travel collapse was the primary reason behind their bankruptcy filing.

The acceptance of the motion would be their first step towards approval of their exit debt financing. Avianca (AVHOQ) aims to seek consent for their existing DIP documents to provide tranches of loans and notes, with a separate motion. This could potentially refinance their current $1.4 billion DIP obligations and provide $220 million in additional liquidity.