U.S court approves LATAM Airlines plan to emerge from bankruptcy
LATAM Airlines Group S.A. an airline holding company headquartered in Santiago, Chile. It is considered the largest airline in Latin America with subsidiaries in Brazil, Colombia, Ecuador, Paraguay and Peru.
In March 2022, during the presentation of the 2021 annual results, LATAM announced that its operations “reached 63.5% of 2019 levels during the (fourth) quarter” of last year.
It also announced a 51% revenue drop in 2021 from 2019, the last year before the pandemic impacted the aviation industry.
The company’s total revenue reached $5,011.3 million last year.
The Chilean-Brazilian airline LATAM avoided bankruptcy two years after invoking Chapter 11 of the United States Bankruptcy Law, following the approval of the reorganization plan approved by the US Justice.
In May 2020, months after worldwide health restrictions due to the expansion of the coronavirus pandemic, the airline declared bankruptcy after the almost absolute suspension of its activities.
In November 2021, LATAM allocated an investment of more than 8,000 million dollars to face the debts declared to benefit from Chapter 11 of the US Bankruptcy Law, which allows a company that is not in a position to pay its debts to restructure without pressure from creditors.
“We are very pleased with the judge’s confirmation of our restructuring plan.
This is a very important step in the process to exit Chapter 11 and we will continue to work intensively to conclude the remaining steps over the coming months,” the airline’s general manager, Roberto Alvo, said in a statement.
LATAM has subsidiaries in Brazil, Chile, Colombia, Ecuador, Peru and the United States.
The financing of the capital necessary to comply with the reorganization plan comes from a capital increase, the issuance of convertible bonds and new debt, LATAM detailed.
“This includes the $5.4 billion of financing backed by major shareholders (Delta Air Lines, Qatar Airways and Grupo Cueto) and LATAM’s main creditors,” the company said in the statement.
In this way, LATAM plans to exit the bankruptcy process in the United States in the second half of 2022.
The company – created in 2012 after the merger of the Chilean LAN and the Brazilian TAM – operated before the pandemic 1,400 daily flights in 145 destinations in 26 countries and in May 2020 its operation was reduced by more than 95%.
Then the airline dispensed with about 12,600 workers, leaving about 30,000 and in June 2020 announced the closure of its subsidiary in Argentina after 15 years of operations.