Sept. 11 (Bloomberg) -- Avianca Holdings SA is considering selling shares in New York as the Colombian airline seeks a higher price than in Bogota, where controller German Efromovich says the stock trades at least 36 percent below its fair value.
“It’s at a totally unjust price, if you have a company that meets all its goals, that distributes generous dividends, in a complicated sector where it’s one of the few profitable airlines in the world,” Efromovich, 63, said yesterday in an interview in his office at the company’s Bogota headquarters. The shares should fetch 6,000 pesos to 7,000 pesos, compared with yesterday’s close of 3,870 pesos.
Avianca said yesterday it was studying filing a registration form with the U.S. Securities and Exchange Commission as part of a possible offering of American depositary receipts. Bolivian-born Efromovich, along with his brother Jose, controls about 70 percent of Avianca’s voting shares through their closely-held Synergy Aerospace Corp., according to a prospectus for the company’s May bond sale.
“It’s part of the company dream but like any goal it has to happen at the right moment, and that could be tomorrow or a month from now or it could be a year from now,” Efromovich said. “We need to decide to pull the trigger.”
The Wall Street Journal reported Sept. 9 that Avianca was planning to announce a sale of shares in New York.
Avianca shares have fallen 14 percent this year, leaving the stock priced at 3.3 times earnings before interest, taxes, depreciation and amortization, the fourth-lowest of 15 airlines based in the Americas with a market value of at least $1 billion, according to data compiled by Bloomberg. The initial public offering price in 2011 was 5,000 pesos.
The company is Colombia’s biggest airline with 151 aircraft at the end of June after taking delivery of two Airbus A320s in the second quarter, according to a report on its website.
Chief Executive Officer Fabio Villegas said in May that the Colombian airline will spend at least $4 billion through 2019 as it buys more than 100 planes to meet rising passenger traffic in Latin America. Avianca will expand available seat-kilometers -- a measure of passenger capacity -- by about 8 percent to 9 percent per year over the next five years, Villegas said. Capacity growth was 10 percent last year.
Adjusted net income surged 14-fold in the second quarter to $72.2 million as sales climbed 12 percent to $1.1 billion. The company’s seat occupancy rate, or load factor, fell to 78.2 percent from 80.8 percent in the first three months of the year.
--Editors: Bradley Keoun, Brendan Walsh