LATAM Airlines plans to finalize its reopening and relisting process of its ADR program on the New York Stock Exchange (NYSE) on July 25, the date it expects to resume trading in that market.
This is subject to the pricing of the public offering that some LATAM shareholders launched today to sell 19,000,000 ADRs, each representing 2,000 ordinary shares of the company. Simultaneously, the company will change the current ratio between shares and ADRs from 1:1 to a new ratio of 2000:1, so each ADR will represent two thousand shares, expecting the implementation of this by July 24.
“This modification is designed to establish an ADR price within a usual range for a newly listed stock, thus meeting the requirements of the New York Stock Exchange (NYSE),” LATAM said in a statement, detailing that the total number of outstanding shares of the company currently amounts to approximately 604 billion common shares, which adjusted by the new ratio would equal about 302 million ADRs.
“In this regard, the Board of Directors approved on July 17 the registration of an additional 100,000,000 ADRs to be added to the 217,000,000 ADRs currently registered, totaling approximately 317,000,000 ADRs. These new ADRs would be available for potential future issuances, including those shareholders who, from time to time, choose to exchange their shares for ADRs in LATAM’s ADR program,” they continued.
The shareholders who launched the public offering also intend to grant the underwriters a 30-day option to purchase up to 2,850,000 additional ADRs at the initial public offering price.
Goldman Sachs & Co. LLC, Barclays Capital Inc., and J.P. Morgan Securities LLC are acting as global coordinators and lead bookrunners for the offering. Citigroup Global Markets Inc., Santander US Capital Markets LLC, Deutsche Bank Securities Inc., BNP Paribas Securities Corp., MUFG Securities Americas Inc., Natixis Securities Americas LLC, and Larraín Vial S.A. are acting as additional bookrunners, and Morgan Stanley & Co. LLC is participating as co-manager in the transaction.
Currently, LATAM has a market capitalization of $8.345 billion, accumulating a 36% increase so far this year on the Santiago Stock Exchange.
In the first quarter of 2024, LATAM Airlines achieved an adjusted EBIT margin of 13.9% (+3.4 pp vs 2023) and a net profit of USD 258 million (+82%). The guidance for 2024 as of May 2 projects an adjusted EBIT margin of between 11% and 12.5%, with revenues ranging between USD 12.8 and 13.1 billion.
