Chile’s LATAM Airlines Group SA said on Friday it has filed a restructuring plan, proposing $8.19 billion of capital in the group to exit its Chapter 11 bankruptcy.
The financing proposal will include a mix of new equity, convertible notes and debt, the group said in a statement, adding that it intends to begin offering $800 million of equity rights to shareholders upon confirmation of the plan.
“While our process isn’t over yet, we have reached an important milestone on our way to a strong financial future,” said Roberto Alvo, chief executive of Latin America’s largest airline.
Recently, LATAM said it received several proposals to get out of Chapter 11 bankruptcy, each of which was valued at more than $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.
When emerging from Chapter 11, LATAM is expected to have total debt of approximately $7.26 billion and liquidity of approximately $2.67 billion, the company said in the statement.
The Santiago-based company reported a loss of some $692 million in the third quarter, as the indebted company still grapples with challenges from the pandemic.
The restructuring plan is accompanied by an approval agreement with the parent group of creditors and some LATAM shareholders.
Chilean airline Latam is close to a restructuring deal to remain a stand-alone company after bankruptcy, as rival Azul tries to build creditor support for a tie-up https://t.co/ckvKirld6e
— WSJ Pro Bankruptcy (@WSJBankruptcy) November 25, 2021