Colombia based Avianca Holdings has submitted a proposal to bankruptcy court for a $2 billion rescue plan.
The plan includes a $700 million convertible loan, which could raise concerns with the court.
The financing plan includes $1.2 billion of new funding with about one-quarter coming from the Colombia government.
The airline had previously said it was unlikely to survive without state aid.
Latin America’s second largest airline filed for bankruptcy back in May and was in need to financial aid even before the pandemic.
It said in the court filing it had at first struggled to get support from financiers for its restructuring plan which is backed by its LifeMiles loyalty program.
"Securing these financing commitments is another concrete step forward in our Chapter 11 reorganization process," said CEO Anko van der Werff.
However, there is no guarantee the court will approve the plan as it is partly made up of a convertible loan.
A US bankruptcy court just blocked a similar restructuring deal proposed for LATAM Airlines.
The judge took issue with the convertible loan which could result in ‘improper’ treatment of other shareholders.
It had been challenged by other creditors.
Shareholder United Airlines is an investor and strategic partner of Avianca.
It is part of the convertible loan but is providing no new money.
Written by Ray Montgomery, US editor
