LATAM Airlines has filed a financial plan in the hope of finalising its exit from Chapter 11 bankruptcy in the US on November 3.
The airline filed for Chapter 11 bankruptcy protection in May 2020, following the impact of the COVID pandemic.
LATAM has since reorganised its debt, reduced the size of its fleet by eliminating its leases of the Airbus A350-900, closed LATAM Argentina, and pledged a 5% use of Sustainable Aviation Fuels by 2030 in its preparation to exit bankruptcy, reports Simple Flying.
The exit plan includes a US$500 million (R9bn) revolving credit and a five-year term loan of US$1,1 billion (R19,9bn), as well as two senior secured notes due totalling more than US$1 billion (R18bn) in 2027 and 2029, and a US$750 million (R13,6bn) five-year bridge loan and the same amount in a seven-year bridge loan. (According to Investopedia, a senior note is a bond that must be repaid before most other debts.)
“This has been another positive week for LATAM. The exit financing was finalised, the preferential option period for shareholders ended and we are close to exiting the Chapter 11 process. We have met the deadlines and objectives that we set for ourselves and we are sure that we will come out of this challenging stage stronger,” said CEO of LATAM, Roberto Alvo.
The airline anticipates that it will exit with US$2,2 billion (R39,8bn) of liquidity and a debt reduction of approximately 35% compared with the debt it had pending before entering the process.
