LATAM submits its restructuring plan

Latin America’s largest carrier, LATAM Airlines Group has submitted its business restructuring plan. 

In a press statement dated November 26, 2021, LATAM Airlines Group CEO Roberto Alvo, said: “We have reeled as global aviation and travel were brought to a virtual standstill by the largest crisis to ever face our industry. While our process is not yet over, we have reached a critical milestone on the path to a stronger financial future.” 

Alvo continued: “We are grateful to the parties who have come to the table through a robust mediation process to reach this outcome, which provides meaningful consideration to all stakeholders and a structure that adheres to both U.S. and Chilean law. Their infusion of significant new capital into our business is a testament to their support and belief in our long-term prospects.” 

LATAM’s new restructuring plan proposes injection of $8.9 billion into the group and its affiliates in Chile, Brazil, Colombia, Ecuador, Peru and the United States, through new equity, convertible notes and debt “which will enable the group to exit Chapter 11 with appropriate capitalization to effectuate its business plan”. 

LATAM Group entered Chapter 11 bankruptcy protection in the United States in May 2020, citing the setbacks of the COVID-19 pandemic followed by stringent travel restriction across the globe.  

According to the statement, LATAM will have total debt of approximately $7.3 billion and liquidity of approximately $2.7 billion after the airline’s restructuring plan is implemented.  

In September 2021, the cash-strapped carrier has obtained a financing proposal of up to $750 million as part of its efforts to exit bankruptcy protection.   

The latest financial report shows that LATAM narrowed its net loss to $691.9 million during the third quarter of 2021, a slight improvement compared to a $769.6 million loss in the second quarter of 2021.