Latam shares sink after presenting its restructuring plan

Santiago de Chile, Nov 29 (EFE) .- Latam airline shares sank this Monday on the Santiago Stock Exchange, marking a 45.40% decline in their value, after the company presented its investment plan last Friday. restructuring to get out of bankruptcy.

The role of the airline, the largest in Latin America, ended the day at 512 pesos, but sank up to 83.9% in the first operations of the day.

The situation occurs on the first business day in the Chilean capital after the company delivered to a New York court a restructuring plan in which it proposes the injection of $ 8.19 billion to the group to get out of Chapter 11 of the Bankruptcy Law of the United States, which the company took advantage of last year hit by the pandemic.

The restructuring involves bringing in those funds through a combination of a capital increase, convertible bonds and debt, and assumes that current shareholders will be diluted 0.1%.

The plan is accompanied by a Restructuring Support Agreement (“RSA”) entered into with the Ad Hoc Group of Parent Creditors, which is the largest group of unsecured creditors in these Chapter 11 cases, and some of Latam’s shareholders.

The RSA documents the agreement between Latam, the aforementioned holders of more than 70% of the parent’s unsecured credits, and the holders of approximately 48% of the US bonds dated 2024 and 2026, and some shareholders who have more than 50% of the ordinary capital, subject to the application of the groups’ definitive documentation, and to the corporate approvals by said shareholders. +

With this capital injection, Latam and its subsidiaries in Brazil, Chile, Colombia, Ecuador, Peru and the United States expect to exit the process with a total debt of approximately 7,260 million dollars and a liquidity of approximately 2,670 million dollars.

The group determined that this is a conservative level of indebtedness and adequate liquidity in a period of continued uncertainty for global aviation, and that it will leave a better position for future operations.

After the economic blow that the pandemic hit, Latam – which is listed on the New York Stock Exchange and the Santiago Stock Exchange – voluntarily accepted the United States Bankruptcy Law in May 2020, a judicial formula that allows a company that cannot pay its debts restructures without pressure from creditors.

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