Latam outlines flight plan to exit judicial restoration in November

On its way out of Chapter 11, the airline said it will make two bond issues worth $1.2 billion, in addition to securing a $500 million line of credit and $1.1 million in financing. billion

In May 2020, in the wake of the first reflexes of the pandemic, Latam filed for judicial reorganization in the United States, through Chapter 11 of the Bankruptcy Act. The process also involved its affiliates in Chile, Peru, Colombia and Ecuador and, two months later, the Brazilian operation was included in this package.

After almost two and a half years of measures to try to readjust its operation, the airline finally seems to see a more positive horizon. The company announced that it expects to exit the judicial recovery process in the first week of November.

“We are on the right path to close all the financing required in the company’s Reorganization Plan. In the coming weeks, we expect to emerge from Chapter 11 with approximately $2.2 billion of liquidity and a debt reduction of approximately 35% from the debt we had before entering this process,” Roberto Alvo said in a statement. Latam CEO.

In this direction, Latam informed that it will carry out two issuances in bonds worth US$ 450 million and US$ 750 million, with maturities in 2027 and 2029, respectively. The company also obtained a revolving line of credit worth approximately $500 million.

At the same time, the company announced access to financing of US$ 1.1 billion, with a term of five years. This last operation represents almost half of the amount to finance the exit from judicial recovery and, according to the company, can be amortized from the third year.

In June this year, Latam announced the financing structure for exiting Chapter 11, which involved contracting new debt, from different lines, with a total value of up to US$ 2.25 billion.

In addition to the financial difficulties, during the judicial recovery process, Latam had to deal with issues such as the investees of rival Azul, whose CEO, John Rodgerson, came to express himself on several occasions saying that he would negotiate directly with the company’s creditors to acquire the operation.

Amid the unfolding of these statements, Jerome Cadier, CEO of Latam Brasil, gave an interview to NeoFeedin December 2021, and spoke about the rival’s strategy and the possible intentions behind this move.

“Azul knows very well, more than anyone else, that Latam comes out of this process incredibly more competitive than it entered. I understand their move, they are trying to complicate our Chapter 11 exit process by putting a huge smokescreen over a proposal that, to me, has been absolutely unfeasible since day one.” extremely violent against Azul.”

In the most recent table with a portrait of Latam’s operation, the company reported a net loss of US$ 523.1 million in the second quarter of this year, reducing its loss by 32% compared to the same period, a year earlier. In this interval, the company’s revenue grew 150.5%, to US$ 2.2 billion.

In Wednesday’s trading session, the company’s shares traded on the American market recorded a rise of 9.41% around 11:40 am (local time). The company is valued at $411.9 million.

Source: Neofeed