LATAM Likely to Receive an Extra Investment of $250 Million

06 August 2020 9:14pm
LATAM aircraft taking off

LATAM Airlines Group announced it could receive an additional US$250 million investment as part of its Chapter 11 filing in the U.S. 

According to the Simple Flying website, this amount could come from shareholders in Chile, the carrier said. Let’s investigate further.

The South American giant is currently under Chapter 11 in the US. LATAM Argentina and LATAM Paraguay are the only branches left out of the reorganization process. Meanwhile, the company has received separate financing proposals, which amount to over US$2 billion in investments.

The first investment, presented as Tranche A of its Debtor-in-possession (DIP) financing proposal amounts to US$1.3 billion. The company Oaktree Capital Management L.P.and its affiliates committed this amount.

After that, the second investment is known as Tranche C. Qatar Airways, and the Cueto and Amaro Families promised an additional US$900 million in May 2020. So where is the extra money coming from?

Back on July 29, LATAM accessed more favorable conditions to its DIP financing. It said, “an offer was presented by the investment bank Jefferies Group LLC, in addition to an updated proposal from existing shareholders.”

LATAM said that in the latest Tranche C financing proposal, there’s an option for shareholders in Chile to subscribe for up to US$250 million in additional financing.

Currently, Judge James Garrity of the Court of the Southern District of New York is deciding how the Tranche C will be financed.

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