LATAM Airlines receives several financing offers to exit bankruptcy

0


[ad_1]

An airliner arrives at Arturo Merino Benitez International Airport in Santiago, Chile on May 26, 2020. REUTERS / Ivan Alvarado

The names of companies and law firms shown above are generated automatically based on the text of the article. We are improving this functionality as we continue to test and develop in beta. We appreciate comments, which you can provide using the comments tab on the right of the page.

NEW YORK, Sept. 9 (Reuters) – LATAM Airlines (LTM.SN) said on Thursday it had received several offers to finance its exit from Chapter 11 bankruptcy, each of which is worth more than $ 5 billion.

LATAM, Latin America’s largest airline, has received offers from creditors and shareholders, according to a case filed with the US bankruptcy court in New York.

The Santiago, Chile-based company did not disclose how many offers it received or who it came from, but Delta Air Lines Inc (DAL.N) is LATAM’s largest shareholder. Other shareholders include Qatar Airways, with a 10% stake.

LATAM, which also operates in Brazil, Colombia, Ecuador and Peru as well as Latin America, Europe, the United States and the Caribbean, said in the filing that the bids came from “its more major debt holders and its majority shareholders. “He said negotiations for funding were ongoing.

LATAM file bankruptcy Chapter 11 in New York City in May 2020 as global travel halted amid the COVID-19 pandemic.

She hopes to complete the main tasks she needs to come out of bankruptcy by the end of the year but may not officially be out by then, according to a person familiar with the thinking of the company who asked. not to be identified.

The financing proposals the airline has received each include a combination of new debt and equity, which would be backed by creditors or shareholders making the offer, the company said. Each offer would likely result in a substantial dilution of existing shares, he said.

However, the source said that LATAM has no plans to sell any of its business units.

The company also projects in Chilean regulatory records a return to pre-pandemic profitability and capacity by 2024, as well as a projected 13% increase in total revenue by 2026.

LATAM estimates the total bankruptcy claims will be between $ 8 billion and $ 9.9 billion, depending on the regulatory record.

The company’s exclusive period to file a draft reorganization plan expires on September 15, but it has filed for an extension until October 15. It will have the possibility of extending this period again by approximately one month if necessary.

LATAM has said it wants to expand its Boeing 787 Dreamliner fleet as part of its five-year business plan and plans to have a fleet of 28 by the end of 2021.

The airline’s overall fleet will grow to 286 by the end of the year, up from around 340 before the pandemic. However, he plans to increase that amount to 331 by 2026.

In August, the company obtained court approval to enter into lease agreements with Avolon Aerospace Leasing Limited and ORIX Aviation Systems for five Dreamliners manufactured by Boeing Co (BA.N).

The company had $ 1.9 billion in cash as of July 31. It also has the option of leveraging additional financing approved earlier in the bankruptcy proceedings, including up to $ 750 million in secondary financing.

Reporting by Maria Chutchian in New York; Editing by Ben Klayman and Lisa Shumaker

Maria Chutchian reports on bankruptcies and corporate restructurings. She can be reached at [email protected]

Share.

About Author

Leave A Reply