LATAM announces reorganization under Chapter protection 11

✈️ Exclusive Benefits for Readers

Verified codes to save on your next trip.

LATAM Airlines Group S.A. and its affiliates announce the entry into the reorganization process under the protection of the Chapter 11 of the USA.

The respective subsidiaries in Chile, Peru, Colombia, Ecuador and the United States began, the present day, a voluntary process of reorganization and restructuring of your debt under the protection of the Chapter 11 from the USA. with the support of the Cueto and Amaro families, y Qatar Airways, two of the group's largest shareholders.

In light of the unprecedented impact that COVID-19 has had on the global aviation industry, this reorganization process provides LATAM with an opportunity to work with the group's creditors, and other interested parties, to reduce your debt and obtain new sources of financing, Giving you the tools to transform the group according to this new reality.

The process of financial reorganization of the Chapter 11 It is a legal framework under which LATAM and its subsidiaries will be able to resize their operations and adapt them to the new demand environment and reorganize their financial balance sheets., enabling them to reemerge as more agile businesses, resilient and sustainable. LATAM and its subsidiaries will continue to fly throughout the process.

The group has secured the financial support of its shareholders, including the Cueto and Amaro families, who have a long-standing relationship with the group and Qatar Airways, who will inject USD $900 million in additional financing under a debtor-in-possession structure (DIP, Debtor in Possession). These partners have a deep understanding of the industry, the group and its operational challenges. Your support demonstrates your trust in LATAM, its subsidiaries and its long-term sustainability. To the extent permitted by law, the group is ready to welcome shareholders interested in participating in this process to provide additional financing. What's more, at the time of the request, the group had approximately USD $1.3 billion available.

LATAM and its subsidiaries are also holding talks with the respective governments of Chile., Brazil, Colombia and Peru to seek support to access additional financing, protect jobs, to the extent possible and minimize disruption to your operations.

The group will continue to adapt and respond to the COVID-19 pandemic, and is actively preparing to welcome back its customers once travel restrictions are lifted and demand picks up., guaranteeing the highest safety standards for passengers and crew that characterize LATAM.

LATAM will continue to fly

how will we remember, weeks ago, Avianca Holdings made the same announcement and this generated great concern among airline passengers, but it is important to indicate that this process, does not imply a closure or liquidation of the airline, precisely, seeks to avoid this process.

The LATAM group is committed to preserving the continuity of its business while it reorganizes. Particularly with respect to employees, customers, providers, business partners and the local communities where it operates.

• LATAM Airlines Group S.A. and its subsidiaries will continue to operate passenger and cargo flights, subject to demand for their services and travel restrictions.
• All current and future tickets will be honored, as well as travel vouchers, Frequent flyer miles and benefits and flexibility policies.
• Group employees will continue to receive their salaries and benefits, as stipulated in the terms of their employment agreements.
• Suppliers will receive their payments in a timely manner for all goods and services delivered from the 26 May 2020 on and throughout this process.
• Travel agencies and other business partners will not be affected or have any disruptions in their interaction with the LATAM group..

Having carefully considered all options, LATAM is confident that the reorganization process under Chapter 11 is the best way forward to meet the group's objectives, while allowing for fleet management and debt management, which is mostly located in the United States. It should be noted that this process is completely different from the concept of bankruptcy, bankruptcy or liquidation. LATAM avails itself of the special protection of this process to pay its employees, fulfill their obligations, pay critical suppliers and carry out any other normal operation of your business, as the group works with the Court and your creditors to resolve your case. The group's management team will continue to lead LATAM through this reorganization and transformation process, under the protection of the Chapter 11.

These unique provisions of the Chapter reorganization process 11 enable the group to minimize business disruptions and protect stakeholder interests, while restructuring its balance sheet to re-emerge as a more agile airline group, resilient and sustainable.

Entities included in the request:

• Chile: LATAM Airlines Group S.A. and some other entities incorporated in Chile are included in the Chapter application 11. They will also request a recognition process in Chilean courts to ensure that the process under Chapter 11 be duly accredited and implemented, which will provide even greater protection to LATAM businesses.
• Colombia: LATAM Airlines Colombia and other entities incorporated in Colombia are included in the Chapter request 11. They will also request a recognition process before the Superintendence of Companies of Colombia to ensure that the process under Chapter 11 be duly accredited and implemented, which will provide even greater protection to LATAM businesses.
• Peru: LATAM Airlines Peru and other entities incorporated in Peru are included in the Chapter request 11 and they will also be submitting a request for a “Preventive Reorganization Process” to INDECOPI, to ensure that these businesses are further protected from any adverse action by creditors.
• Ecuador: LATAM Airlines Ecuador is included in the Chapter request 11.
• USA: Group operating entities incorporated in the United States, excluding special purpose vehicles (“special purpose vehicles”) of the LATAM group are included in the Chapter application 11.

Entities not included in the application:

• Argentina, Brazil and Paraguay: LATAM entities in Argentina, Brazil and Paraguay are not included in the Chapter application 11. LATAM entities in Brazil continue discussions with the Brazilian government regarding the next steps, seeking financial support for the group's operations in Brazil.

It is important to stress that, regardless of whether they are included in the application or not, all group companies will continue to operate as travel restrictions and demand allow.

✈️ Exclusive Benefits for Readers

Search here for hotels ALL over the world at the best price.