Latam Airlines, in bankruptcy in the USA for the “coronacrisis”

Latam Airlines Group filed a request to reorganize under the protection of Chapter 11 of the United States Bankruptcy Law, amid the global crisis caused by the coronavirus pandemic.

This action will allow the airline to continue operating while preparing a plan to pay its creditors and restructure its operations in the face of the crisis caused by the Covid-19 pandemic in the aeronautical industry.

“Latam entered the Covid-19 crisis as a healthy and profitable airline group, yet exceptional circumstances have led to a collapse in demand and not only have stopped global aviation and its revenues, but have switched to industry into the future, ”said Roberto Alvo, CEO of Latam.

“We have implemented a number of difficult measures to mitigate the impact of this unprecedented disruption across the industry. But, ultimately, this path represents the best option to lay the right foundation for the future of our airline group. We have our sights set on a post-Covid-19 future and we are focused on transforming the group to adapt it to a new way of flying, where the health and safety of our passengers and collaborators are the primary objectives, “the statement added. .

Latam Airlines and its subsidiaries in Chile, Peru, Colombia, Ecuador and the United States (USA) have started this Tuesday a voluntary process of reorganization and restructuring of debt in the USA. under the protection of its largest shareholders, the Cueto and Amaro families and Qatar Airways.

After the impact of the coronavirus crisis, the company has used this process to work with creditors and reduce their debts, in addition to obtaining new financing channels.

Specifically, they seek tools to transform the group “according to the new reality”, adapting its operations to demand and reorganizing its financial balances. Throughout the process, the group’s subsidiaries will continue to operate.

The group has secured financial support from its shareholders, the Cuero and Amaro families and Qatar Airways, who will inject the company with $ 900 million (824 million euros) of additional liquidity under a “debtor-in-possession” structure, reports the agency Europa Press.

In addition, when the law allows it, the group is interested in welcoming shareholders who want to participate in this process to provide additional financing. At the time of the restructuring request, the group had approximately $ 1.3 billion (€ 1,190 million) of liquidity available.

Furthermore, the company is in talks with the governments of Chile, Brazil, Colombia and Peru to seek additional financing, protect employment and minimize the impact on its operations.

The group says it will continue to adapt as the coronavirus crisis develops. In this regard, it is preparing to return to business once travel restrictions are lifted and demand increases.

The company’s commitment is to preserve business continuity while reorganizing in terms of employment, customers, suppliers, and business partners. Therefore, it will continue to operate passenger and cargo flights subject to demand, employees will receive their wages and benefits, and providers will receive their payments.

All of its subsidiaries except those of Argentina, Paraguay and Brazil are included in this debt reorganization procedure with the United States, the latter immersed in its own negotiations with the Brazilian Government.

Latam statement

Latam Airlines Group and its subsidiaries in Chile, Peru, Colombia, Ecuador and the United States today filed a request to reorganize under the protection of Chapter 11 in the US. USA The Chapter 11 process is designed to allow companies to operate their businesses in the normal way through an orderly restructuring process, while resolving their financial issues. For their part, subsidiaries in Argentina, Brazil and Paraguay are not included in the request.

Written by Argentina News

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