Brazil’s Azul says LATAM gave no chance to its US$13 billion offer

RIO DE JANEIRO, BRAZIL – LATAM has “flatly rejected” Azul’s (AZUL4) offer to buy the carrier, which is undergoing judicial reorganization, although the sale would be a better deal for creditors, Azul argues in new court filings.

Azul has for months expressed interest in a partnership with Chile’s LATAM, but the airline in receivership has refused to seriously engage in negotiations, Azul’s lawyers said in court filings. Azul said its deal outlined in a November 11 document values LATAM at US$13 billion and would provide more to creditors than the current proposal, which is about to seek court approval.

LATAM said Azul’s offer lacked critical details, such as how the deal would be executed, how long it would take and whether it could be approved by regulators, as well as the required support from creditors.

LATAM’s reorganization plan is backed by a key group of creditors, including SVPGlobal, Sculptor Capital Management and Sixth Street Partners, and its largest shareholders.

STRATEGIC EXIT

LATAM is approaching a critical juncture in its effort to exit the bankruptcy proceedings, which began with its filing for protection from creditors through Chapter 11 of the Bankruptcy Act in May 2020, when mobility restrictions imposed by Covid-19 prevented international travel.

On Thursday, the company will seek permission from a bankruptcy judge to begin collecting creditor votes on its restructuring plan. Its official creditors’ committee opposes this step, claiming that the plan violates U.S. Bankruptcy Law.

The case is LATAM Airlines Group SA et al., 20-11254, U.S. Bankruptcy Court for the Southern District of New York (Manhattan).

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