Continental/ Avianca
BOGOTA, Colombia, Jan 26 (Reuters) - Continental Airlines Inc. (NYSE:CAL - News) is negotiating the possible purchase of struggling Colombian flag carrier Avianca, a source close to the South American airline said on Monday.
Continental's talks over the past few weeks follow the rejection by Avianca's owners of a rival bid by LanChile (Santiago:LAN.SN - News; NYSE:LFL - News), said the source, who asked not to be named.
Avianca is owned jointly by Colombian conglomerate Valores Bavaria (VBS.CN) -- itself controlled by magnate Julio Mario Santo Domingo -- and Colombia's National Coffee Growers' Federation.
The airline has been seeking to restructure at least $269 million in debt in Chapter 11 bankruptcy protection proceedings in the United States.
The bid by LanChile, which has publicly stated its interest in the Colombian carrier and has already acquired airlines in Peru and Ecuador, was too low, the source said.
Continental runs a daily flight from Bogota to New York and another to Houston. It has an agreement to share air miles with Avianca.
The fifth-largest U.S. airline declined to comment last week on whether it was negotiating to buy Avianca, which always refuses to speak to reporters about the identity of possible investors
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Due to the impending merger of the DR and Colombia
