LATAM Airlines announced last Saturday that, «after an exhaustive process of searching for the best available conditions» for the financing for its Chapter 11 exit process, it signed letters of commitment with different financial institutions.
According to the company, this represents a «sign of confidence from the market» towards it. On the other hand, they stated that the commitments are «one more step» to complete the process during the second half of 2022, «with a more solid financial structure».
The financing is part of the restructuring contemplated in the company’s Reorganization Plan. The commitment letters provide for new debt in the amount of 2.25 billion dollars. They also consider a committed line of credit totaling 500 million dollars. The process is subject to the approval of the U.S. court handling the case.
In addition, they account for a 1.172 billion dollars financing facility to be provided for as long as the Chapter 11 process remains in effect. The amount will be available in the form of DIP (debtor-in-possession) financing. However, the exit financing was structured to remain available once the company completely ends the process.
«This commitment assures us the totality of the financing required to complete our restructuring plan and, very importantly, with a degree of flexibility that allows us to optimize existing market conditions», said Roberto Alvo, CEO of LATAM Airlines.
The company had voluntarily entered the process in 2020 in order to overcome the crisis caused by restrictions on air travel.
On the other hand, it is still awaiting the court’s decision regarding its Reorganization Plan. The company has good expectations in this regard. In that same sense, they highlighted the agreements and the support of practically all creditors.
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