Latam reorganization plan approved

The US Bankruptcy Court for the Southern District of New York approved Latam Airlines Group’s reorganization plan with subsidiaries in Brazil, Chile, Colombia, Ecuador, Peru and the United States under the Chapter 11 reorganization process.

The Plan, supported by virtually all creditors, is the result of months of negotiations between key stakeholders, which even involved an extensive mediation period.

The Plan complies with US and Chilean legal requirements. The confirmation warrant issued by the US court is the latest milestone in the United States of the Chapter 11 lawsuit initiated by Latam to ensure its long-term sustainability.

“We are very pleased with the court’s confirmation of our restructuring plan. This is a very important step in the Chapter 11 exit process and we will continue to work hard in the coming months to complete the remaining steps,” said Roberto Alvo, CEO of Latam Airlines Group SA.

Latam has announced that it will work to complete the ongoing phases in Chile, including the Extraordinary General Meeting of Shareholders to approve the new capital structure, the registration of shares and convertible bonds with the Financial Market Commission (CMF) and the offering of preferential rights. which, in accordance with the law, will be offered on a preferential basis to all shareholders who wish to participate in the new capital structure and thus avoid the consequences of the dilution of ownership that the envisaged capital increase entails.

Once in place, the Latam plan will inject approximately USD 8 billion through a combination of a capital increase, convertible bond issuance and new debt.

This figure includes USD 5.4 billion in funding backed by the main shareholders (Delta Air Lines, Qatar Airways and Grupo Cueto) and the main creditors of LATAM (i.e. the creditors represented by the ad hoc group of creditors guarantor and certain local bondholders).

Latam’s departure from the Chapter 11 process is expected in the second half of 2022.

Source: El heraldo

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