Chile Airlines says it plans $8.19 bn restructuring plan

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Chile Airlines says it plans $8.19 bn restructuring plan

Nov 27, Reuters -- Chile's LATAM Airlines Group SA said on Friday it has filed a reorganization plan with an $8.19 billion infusion of capital in a bid to exit its Chapter 11 bankruptcy.

The financing proposal will include new equity, convertible notes and debt, and it intends to launch an $800 million equity rights offering to shareholders upon confirmation of the plan, the group said in a statement.

Roberto Alvo, the chief executive of the largest airline in Latin America, said that the process is not yet over, but that we have reached a critical milestone in the path to a stronger financial future.

LATAM received several offers to fund the exit from Chapter 11 bankruptcy, each of which are worth more than $5 billion. The group filed for Chapter 11 bankruptcy protection in New York in May 2020, as world travel came to a halt due to the COVID 19 pandemic.

After exiting Chapter 11, LATAM expects to have total debt of about $7.26 billion and a liquidity of about $2.67 billion, the company said in the statement.

The company in Santiago reported losses of $692 million in the third quarter, as the company was still battling challenges from the pandemic.

The restructuring plan is accompanied by a support agreement with the creditor group Parent Ad Hoc Group and some LATAM shareholders.