The U.S. Bankruptcy Court for the Southern District of New York approved a plan of reorganization filed by LATAM Airlines Group and its subsidiaries in Brazil, Chile, Colombia, Ecuador, Peru and the United States, in the context of its Chapter 11 reorganization proceeding.
Backed by nearly all of LATAM’s creditors, the plan is the result of months of negotiations among major stakeholders, which included an extensive mediation period. The plan complies with U.S. and Chilean legal requirements. The confirmation order issued by the U.S. court represents the latest milestone in the U.S. Chapter 11 process initiated by LATAM to ensure its long-term sustainability.
“We are very satisfied with the judge’s confirmation of our restructuring plan. This is a very important step in the process to emerge from Chapter 11, and we will continue working hard to complete the remaining steps in the coming months,” Roberto Alvo, CEO of LATAM Airlines Group, said.
LATAM is now focused on the implementation of the corporate actions necessary to complete the exit from the Chapter 11 reorganization process in the coming months. This includes approval at an extraordinary shareholders’ meeting of the new capital structure contemplated in the plan, the registration of shares and bonds in the securities registry of the Financial Market Commission and the implementation of the respective preferential offering periods of the convertible shares and bonds in favor of LATAM’s current shareholders.
Once effective, the LATAM plan will inject approximately $8 billion through a combination of a capital increase, the issuance of convertible bonds and new debt. This includes $5.4 billion of financing backed by major shareholders, including Delta Air Lines, Qatar Airways and Grupo Cueto, and LATAM’s major creditors. LATAM’s exit from the Chapter 11 process is expected to occur during the second half of 2022.
