SAO PAULO – On Friday, Latam presented a judicial reorganization plan to the United States Courts, which foresees the injection of US$ 8.19 billion, after having postponed twice the presentation of the proposal amidst a dispute between current shareholders with the Azul company to maintain the assets.
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Under Latam’s plan, the money would be raised through a combination of new capital, convertibles and debt, according to a statement released by the company.
The Chilean company has been in the process of restructuring in the US since May 2020 and had debts of approximately US$18 billion at the time. According to Latam, the proposal presented this Friday was accompanied by a Restructuring Support Agreement (RSA) signed by the largest group of unsecured creditors.
Debt of US$ 7.26 billion
Under the plan, the airline would emerge from the turnaround process with total debt of approximately $7.26 billion and liquidity of approximately $2.67 billion.
“The group determined that this is a conservative level of indebtedness and adequate liquidity in a period of continuous uncertainty for world aviation, which will allow a better positioning of the group for future operations”, informed the company, in a note.
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The next step, now, is to hold a hearing to approve the adequacy of the Chapter 11 Disclosure Statement, the US rule that governs judicial recoveries and bankruptcy, and the procedures.
This should take place in January 2022. If the Disclosure Statement is approved, Latam will initiate the application process to seek approval of the plan by creditors.
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Azul, controlled by David Neeleman, should present a competing plan that provides for the sale of Latam’s assets, with an eye on an acquisition that gives it gains of scale in Brazil.
Latam asked the American Court that the hearing to confirm the recovery plan be held in March 2022.
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“We would like to thank those who participated in the robust mediation process to achieve this result, which significantly includes all stakeholders and presents a structure adjusted to US and Chilean legislation. The significant injection of new capital into our business is proof of this. of their support and confidence in our long-term prospects,” said Roberto Alvo, CEO of Latam, in a statement.