SANTIAGO (Reuters) – LATAM Airlines, Latin America’s biggest airline group, said on Thursday it had secured an additional $1.3 billion for its financing proposal in a New York bankruptcy court, while adding its unit to the Brazil in the debt restructuring process.
LATAM LTM.SN filed for bankruptcy protection in the United States in May, seeking to reorganize an $18 billion debt. It was the largest airline in the world to date to request an emergency reorganization due to the coronavirus pandemic.
On Thursday, it said it secured $1.3 billion in additional funding from Oaktree Capital Management LP and its affiliates, enough to meet the company’s financing needs amid the crisis. The company had already secured $900 million for the process from shareholders Cueto Group and Qatar Airways. “Combined … it is hoped that financial support will not be required from governments,” the company said in a statement early Thursday.
The company said the proposal still required US court approval. LATAM also announced that it would add its Brazil unit to the U.S. bankruptcy protection process, calling the move “a natural step in light of the continuing COVID-19 pandemic.”
The airline’s subsidiaries in Chile, Colombia, Peru, Ecuador and the United States joined the Chapter 11 process after the company’s initial bankruptcy announcement in May. “LATAM Airlines Brazil will continue to operate passenger and cargo flights as normal, as LATAM Airlines Group and its subsidiaries have done since entering Chapter 11,” the statement said.
Three of the largest airlines in Latin America – LATAM, Aeromexico AEROMEX.MX and Avianca Holdings AVT_p.CN – are now in chapter 11, as governments avoided possible bailouts.
Analysts expect a change in the post-crisis landscape in the region with fewer competitors and higher ticket prices.
Reporting by Fabian Cambero and Dave Sherwood; Editing by Bernadette Baum and Nick Zieminski