LATAM seeks new extension of time to submit restructuring plan

RIO DE JANEIRO, BRAZIL – The company said in a statement that the petition “supports continued progress in negotiations with the several stakeholders in the Chapter 11 proceeding” of the U.S. Bankruptcy Act, which it voluntarily resorted to in May 2020 after the economic blow delivered by the pandemic.

The decision, which allows a company unable to pay its debts to restructure free of creditor pressure, included both the parent company – listed on the New York and Santiago stock exchanges – and its subsidiaries in Chile, Peru, Colombia, Ecuador and the USA.

On the same day, the company announced a financing proposal for US$12 billion presented by a group of ad-hoc creditors represented by Moelis & Company and White & Case LLP, in addition to other options being negotiated to successfully complete the restructuring process.

Last September, the company published its 5-year business plan and projected the recovery of its profitability to pre-pandemic levels by 2024, with a 78% increase in operating income.

Founded in 2012 from the merger between Chile’s LAN and Brazil’s TAM, LATAM flew to 145 destinations in 26 countries before the pandemic and operated approximately 1,400 daily flights, carrying over 74 million passengers per year.

With the pandemic, it reduced its operation by up to 95% and closed 2020 with a 58.4% drop in operating revenues and a net loss of US$4.54 billion.