During a press conference held this morning, November 27, LATAM Airlines’s CEO Roberto Alvo made further comments following the presentation last night of its reorganization plan for the exit of its Chapter 11 process in the United States.
Alvo provided his view on the positive perspectives for the company’s brief future in view of the support received from 71% of the creditors for this financial proposal, which includes the three main shareholders – Delta Air Lines, the Cueto family, and Qatar Airways Investment -, and also commented on the rumors of an attempt to buy LATAM by Azul.
As stated by the CEO himself, this proposal depends on the court’s approval, which will evaluate and deliver its ruling in January 2022, and also on the approval of the creditors. This creditors’ vote can only be requested by LATAM after the judge’s release in January, and then the deadline will be up to 30 days for creditors to vote after receiving the company’s official communication. Given this current support of 71%, the expectation is for approval, since two-thirds (66%) of the votes are required.
After the approval of the financial plan in the United States, there will still be the request for approval in the Commission for the Financial Market in Chile (CMF), so the forecast is that the exit from Chapter 11 occurs around the middle of 2022.
According to Alvo, the 2.67 billion dollars liquidity that will be achieved through this financial plan is unprecedented in the company’s history, and the resulting debt levels will be the most adequate among all airlines in the region.
The CEO also emphasizes that LATAM Brazil, specifically, will come out of the process with 100% of its debts paid off, placing it in a very good financial position.
When asked about Azul Linhas Aéreas, Alvo stated that there was an expression of interest submitted by the company directly to LATAM, as well as by several other interested parties, but after being evaluated by creditors, shareholders, and the company, it was deemed “insufficient and incomplete” for LATAM’s purposes.
Thus, the only way for Azul to enter into a reorganization is through an agreement with its creditors, since until Chapter 11 is lifted LATAM and its creditors have the exclusive right to present its reorganization proposal to the judge and to request a vote after the judge’s approval.
Thus, since 71% of its creditors support the financial project presented, LATAM is confident that it will be approved, so that Azul will not have sufficient support to have at least 66% of its creditors support another proposal of its own.
Finally, regarding the uncertainties that now arise with the new Covid-19 strain discovered in Africa, Alvo considers that it is still too early to define what the real impacts on the airline market are and their influence on LATAM plans.
