November 29. LATAM Airlines Group said on Friday it had filed a reorganization plan, proposing a US$8.2 billion injection of capital in a bid to exit its Chapter 11 bankruptcy process, and at the same time announced it had rejected the Brazilian airline Azul acquisition proposal as “incomplete” and “insufficient”.
The financial proposal includes a mix of new equity, convertible notes and debt, LATAM Group said, adding that it intends to launch US$ 800 million equity rights offering to shareholders, once it has a confirmation of the plan.
LATAM admitted it had received several offers to fund the exit from Chapter 11 bankruptcy, each of which is worth more than US$ 5 billion. The group filed for Chapter 11 bankruptcy protection in New York in May 2020 as world travel came to a halt amid the COVID-19 pandemic.
The Santiago based company said that on emerging from Chapter 11, it expects to have debts of about US$ 7.26bn and liquidity of some US$ 2,67bn. The restructuring plan is accompanied by a support agreement with creditor group Parent Ad Hoc Group and some LATAM shareholders.
CEO Alvo explained that “we discarded the Azul initiative since it was not possible to proceed on that proposal, and its content remains confidential”.
The reorganization program will be assessed by the US bankruptcy court next January 27. Following this, the group will have a period to have the program approved by its creditors.
Source: Merco Press