Latam has incorporated its Brazilian subsidiary into its Chapter
11 bankruptcy reorganization.
The move coincides with Latam securing $1.3 billion in debtor-in-possession financing from Los Angeles-based
investment firm Oaktree Capital Management. If approved by the bankruptcy court,
the financing would augment the $900 million pledged by major Latam
shareholders Qatar Airways, Chile’s Cueto family and Brazil’s Amaro family at
the time of the Chapter 11 filing in late May.
Including the Brazil subsidiary, Latam’s largest unit, into
the filing is the easiest way to give it access to proposed debtor-in-possession
financing, the company said. Latam’s subsidiaries in Chile, Peru, Colombia,
Ecuador and the U.S were already included in the filing. The carrier’s
Argentina unit ceased operations last month.
Like its other restructuring affiliates, the Brazil
subsidiary will operate normally, continue to pay employees and honor tickets
and loyalty point accruals.
“This show of confidence in the group’s future has enabled
us to secure all the resources that are required to continue operating during
the crisis and as demand recovers, to successfully complete the Chapter 11
process,” Latam CEO Roberto Alvo said of the Oaktree financing.
The carrier said it is hopeful that it will not need any