March 2, 2017 / 10:09 PM / in 9 months

Top Avianca shareholder Efromovich says deal with United 'will happen'

(Reuters) - Avianca Holdings SA AVT_p.CN top shareholder, German Efromovich, said on Thursday that a deal between Avianca and United Continental Holdings Inc (UAL.N) “will happen,” despite a lawsuit aimed at blocking the deal filed by the airline’s No. 2 shareholder this week.

An airplane of Colombian airline Avianca takes off from El Dorado Airport in Bogota, Colombia, February 1, 2017. REUTERS/Inaldo Perez

A suit brought in New York by Kingsland Holdings alleges that the deal for Avianca with United is “an egregiously one-sided proposed transaction that Efromovich secretly negotiated with United for his own benefit at the expense of Avianca and all of its other shareholders.”

Efromovich said during a news conference in New York on Thursday that the deal with United was just “an extension of an already existing relationship” and was the best possible deal for Avianca’s shareholders. He also insisted that reports of higher bids for Avianca from Delta (DAL.N) and other airlines “are not accurate and are not correct.”

Efromovich called the lawsuit “extortion” and accused Kingsland of filing it “without any grounds because of greed and ego.” He insisted that Kingsland was seeking to force Efromovich’s investment company Synergy to sell its stake in Avianca because it would increase the value of Kingsland’s stake in Avianca.

United has so far not commented on the lawsuit and Efromovich said he has not spoken to representatives from the company since the suit was filed.

In response to questions about the involvement of activist investor Paul Singer’s hedge fund Elliott Management, Efromovich said Elliott has “nothing to do with Avianca” and hadn’t extended any funding for this deal.

Media reports have said that Elliott was pushing Efromovich to sell his shares because the hedge fund loaned him money leveraged against his stake in Avianca. Efromovich said he was “not selling, period.”

He declined to answer questions about whether or not Elliott or United had extended any funding to Synergy.

Reporting by Dion Rabouin; Editing by Phil Berlowitz

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