Leaked Video of Chairman’s ‘Bankrupt’ Flub Sends Avianca to Record Low

(Bloomberg) -- Avianca Holdings SA plunged to a record low after the Colombia-based airline’s chairman was seen in a leaked internal video telling employees that the company is “bankrupt.”

The stock dropped as much as 15% in Bogota trading before paring losses.

Kriete was trying to reiterate to employees the urgency of getting back to profitability, said Carlos Enrique Rodriguez, head of equity research at Bogota-based brokerage Ultraserfinco. Instead, his comments wiped out more than $40 million of market capitalization, as the video surfaced on social media after markets closed yesterday.

The company quickly tried to qualify the statement, taken from a video in which Chairman Roberto Kriete is seated aside CEO Anko van der Werff at a company meeting, saying his message was taken out of context.

Kriete “used the colloquial term ‘bankrupt’”, though the company is not in any bankruptcy or insolvency process, the airline said.

A new management team, led by Kriete, who took over as chairman in May following a corporate shakeup, is attempting to turnaround the money-losing airline by cutting unprofitable routes, selling some assets and reducing debt.

To contact the reporter on this story: Ezra Fieser in Bogota at efieser@bloomberg.net

To contact the editors responsible for this story: Nikolaj Gammeltoft at ngammeltoft@bloomberg.net, Matthew Bristow

©2019 Bloomberg L.P.