Latam Airlines Group SA can send its $5.4 billion bankruptcy-exit plan to creditors for a vote, a judge said Tuesday, handing the airline a partial victory over debtholders who want to pursue alternatives, including a takeover by rival Azul SA, Bloomberg News reported. The decision means the company can seek final court approval for its reorganization plan in April and possibly exit bankruptcy several months after that, should it get support from securities regulators in Chile, where Latam is based.
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Latam Airlines Group SA “flatly rejected” Azul SA’s offer to buy the bankrupt carrier even though the sale would be a better deal for creditors, Azul contends in new court filings, Bloomberg News reported. Azul for months has been expressing interest in a tie-up with Chile’s Latam, but the bankrupt airline has refused to seriously engage in talks, lawyers for Brazil-based Azul said in court papers. Azul said its deal outlined in a Nov. 11 term sheet values Latam at $13 billion and would provide more for creditors than Latam’s current proposal, which is on the verge of seeking court approval.
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Local creditors of Latam Airlines Group SA are up in arms over a bankruptcy plan that would leave them with next to nothing even as holders of overseas bonds get almost all their money back, Bloomberg News reported. BancoEstado SA, a Santiago-based bank acting on behalf of local noteholders, has asked Latin America’s largest airline to improve its terms. The investors are threatening to sue if their demands aren’t meant, and contend that as a Chilean company, Latam should have filed for protection in local courts — instead of New York — that would have treated domestic creditors better.
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Latam Airlines Group SA’s official low-ranking creditor group is unhappy with the Chilean carrier’s bankruptcy exit proposal, arguing a sale to rival Azul SA could leave its members much better off, Bloomberg News reported. In court papers filed on Wednesday, Santiago-based Latam’s unsecured creditor committee said the airline’s current reorganization plan is so unfair that it can’t win court approval. It flouts U.S. bankruptcy rules by favoring some evenly-ranked creditors over others and giving value to shareholders that don’t deserve it, lawyers for the group wrote.
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Brazilian airline Azul SA confirmed on Monday that it made an offer earlier this month to combine with Chile’s LATAM Airlines Group , which is in bankruptcy proceedings, but said it had since decided to focus on its own operations, Retuers reported. In an exchange filing published late on Sunday, Azul said that it would consider potential partnerships only in the future. The Brazilian airline said its non-binding proposal submitted on Nov. 11 had included around $5 billion in equity financing and was backed by some creditors of LATAM.
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Chile's LATAM Airlines Group SA said on Friday that it has filed a reorganization plan, proposing an $8.19 billion infusion of capital into the group, in a bid to exit its chapter 11 protection, Reuters reported. The financing proposal will include a mix of new equity, convertible notes and debt, the group said in a statement, adding that it intends to launch an $800 million equity rights offering to shareholders, upon confirmation of the plan.
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Azul’s chief executive doubled down on comments he made last week about a potential acquisition of LATAM Airlines Group, pending the outcome of the Chilean airline’s bankruptcy protection process, Flight Global reported. “The macroeconomic situation promotes consolidation in this space,” Azul’s John Rodgerson said during the Sao Paulo-based company’s third-quarter earnings call on 11 November.
Brazilian airline Azul SA is interested in buying the whole of Chile's bankrupt LATAM Airlines Group and is ready to make an offer if creditors fail to agree on a restructuring plan, Azul chief executive John Rodgerson told Chilean newspaper Diario Financiero on Monday, Reuters reported. "We know exactly what we will offer," Rodgerson said in the interview, adding that Azul would likely have to wait until Nov. 23 when a statutory limit on reaching a restructuring plan runs out. "We would buy the whole asset.
Latam Airlines Group’s chief executive wants to steer his company out of bankruptcy next year with a shrinking carbon footprint and lower costs that can help it grow in a travel market still recovering from the coronavirus pandemic, Bloomberg News reported. Roberto Alvo said that Latin America’s largest air carrier is making progress on a financing plan that it will submit to a judge next month, putting it on track to exit bankruptcy protection as soon as the first half of 2022.
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