LATAM Airlines Seeks Bankruptcy Court Approval for $2.75 Billion in Exit Loans

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June 13 (Reuters) – LATAM Airlines Group SA (LTM.SN), Latin America’s largest airline group, asked a bankruptcy judge on Monday to approve $2.75 billion in new loans to fund the release of the company from chapter 11.

U.S. Bankruptcy Judge James Garrity in Manhattan will consider the request during a court hearing on June 23.

LATAM, which has operating units in Chile, Brazil, Colombia and Peru, says it has commitments for $2.75 billion in loans from JPMorgan Chase Bank NA, Goldman Sachs Lending Partners LLC, Barclays Bank Plc, BNP Paribas , BNP Paribas Securities Corp and Natixis, with an additional $1.17 billion agreement to refinance and extend its existing bankruptcy loan.

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“This commitment guarantees us the full amount of funding needed to carry out our restructuring plan and, very importantly, with a degree of flexibility that allows us to optimize existing market conditions,” the director said on Saturday. General of LATAM Airlines, Roberto Alvo, in a press release.

In addition to the judge approving the exit loans, LATAM is awaiting Garrity’s decision on whether to approve its overall restructuring plan.

LATAM must secure its exit loans before it emerges from bankruptcy and continue to raise funds through an $800 million post-bankruptcy equity offering, according to court documents.

Born in 2012 from the merger of Chilean LAN with its Brazilian rival TAM, LATAM was one of three major Latin American airlines to seek Chapter 11 protection in New York two years ago amid the economic fallout from the pandemic. The other two, Mexico’s Grupo Aeromexico (AEROMEX.MX) and Colombia’s Avianca SA (AVT_p.CN), have both emerged from bankruptcy in the past six months. Read more

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Reporting by Dietrich Knauth; Editing by Lisa Shumaker

Our standards: The Thomson Reuters Trust Principles.

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