A U.S. court has ruled in favor of Latin America’s LATAM Airlines plan to file for bankruptcy under U.S. law, the airline said on Saturday. «We are very pleased that our Reconstruction Plan has been approved by a judge. This is a very important milestone in the Chapter 11 release process, and we will continue to work hard to summarize the remaining milestones in the coming months.The executive director of the company Roberto Alvo says in the announcement.
Applying to Chapter 11 in the United States is a device that allows a company that can no longer repay its debt to rebuild itself, protected from its creditors, by continuing its current operations. The plan calls for $ 8 billion in capital inflows from fresh capital, convertible bonds and debt, the group, whose business plummeted during the coronavirus, said last year.
Born in 2012 to a merger of Chilean LAN and Brazilian TAM, LATAM applied for Chapter 11 protection last May due to losses accumulated during the coronavirus epidemic. In September, a New York court approved a $ 2.45 billion loan to support LATAM, which cut thousands of employees and shut down its Argentine subsidiary to save money.
After exiting Chapter 11, LATAM is expected to have approximately $ 7.2 billion in debt and $ 2.67 billion in cash. The company plans to go bankrupt by the second half of 2022, according to its press release. LATAM has subsidiaries in Chile, Colombia, Ecuador, Peru and the United States.
Source: Le Figaro
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