U.S. Bankruptcy Judge Rejects LATAM Airlines Proposed $2.4 Billion Financing Deal

A U.S. bankruptcy judge on Thursday rejected a $2.4 billion financing plan for struggling LATAM Airlines on the grounds that a convertible loan included as part of the package would amount to “improper” treatment of other shareholders, Reuters reported. The move is a setback for LATAM, which needs short-term liquidity. But in a lengthy court decision, the judge left the door open for the Chilean carrier to introduce a similar financing plan in the future, this time without the possibility of converting part of the loan into equity. The airline had no immediate comment on the decision. The proposal supported by LATAM was composed of a $1.3 billion loan from asset management firm Oaktree Capital Management and a $900 million convertible loan from several key LATAM shareholders, including the Cueto family that controls the airline and Qatar Airways. Read more

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