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LATAM Airlines Files for Chapter 11 Bankruptcy
In a communication addressed to the Chilean Financial Market Commission (CMF), LATAM Airlines Group has announced that it will voluntarily file to reorganize under Chapter 11 protection of the United States Code.
The requested restructuring involves subsidiaries in Chile, Colombia, Peru, Ecuador, the United States of America, the Cayman Islands and the Netherlands. The subsidiaries of Argentina, Brazil, and Paraguay are not included in this procedure.
The Brazilian subsidiary has received a state monetary contribution, but there have been no news or announcements of additional financing for Argentina and Paraguay.
The measure grants an automatic suspension of 180 days of the execution of the unpaid debts, and according to what was expressed in the statement, LATAM will use that time to renegotiate key contracts “adjusting them to current market conditions.” In the same sense, LATAM seeks to “restructure its financial balance and adjust the size of its operations to the new reality.”
The company announced that it obtained financing commitments from shareholders related to the Cueto and Amaro families, and Qatar Airways for $900 million that will be made available once the agreements determined by the special administration are confirmed.
LATAM stated, minutes after announcing the restructuring, that it will continue to operate.
Through a video, Roberto Alvo, CEO of LATAM Airlines Group, sought to bring peace of mind to passengers, “The company states that there will be no impact on cargo, booking, voucher or Latampass miles and points operations. The special site the company prepared ensures that the Chapter 11 financial reorganization process is not a liquidation process.“
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