- Latam filed for bankruptcy protection in May, aiming to reorder $18 billion in debt as it was hammered by the world travel crisis generated by the coronavirus pandemic;
- At the time, it was the world’s largest airline to file for bankruptcy due to COVID-19.
Latam Airlines has presented a new $2.45 billion financing proposal in the middle of its bankruptcy protection process in the United States, replacing a proposed debtor-in-possession loan that prompted the judge to reject the original plan earlier this month.
Latam, the largest air transport group in Latin America, told the Chilean securities regulator in a letter on Wednesday night that the new debtor-in-possession loan maintained “basically” the structure presented in July.
READ ALSO: Without government aid, Latin American airlines will take longer to recover
In one tranche, asset management firm Oaktree Capital Management amended the proportion of the loan it was offering to $1.125 bln from $1.3 billion originally, with a group of creditors put together by investment bank Jefferies Group providing an additional $175 million.
In a second tranche, several key Latam shareholders, including the Cueto family, which controls the airline, and Qatar Airways, changed their offering from the $900 million convertible loan previously rejected by the judge amid opposition from other creditors to $750 mln with $250 mln additional financing from creditors led by Jefferies Group and $150 mln from other Latam shareholders or new investors.
READ ALSO: Latam, the region’s biggest airline, has laid off 12,600 employees since March
Latam said in its statement that if new investors could not be found, key Latam shareholders and the Jefferies Group creditors would make up the difference. It also stipulated that both tranches of loans had to be paid in cash, rather than equity as previously in the plan rejected by the judge.
Latam filed for bankruptcy protection in May, aiming to reorder $18 billion in debt as it was hammered by the world travel crisis generated by the coronavirus pandemic. At the time, it was the world’s largest airline to file for bankruptcy due to COVID-19.
