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.
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