“If the interest shown in the DIP materializes, state support would not be required by the companies that are part of the process,” said CEO Roberto Alvo.
Latam Airlines formalized before the Court of the Southern District of New York the US $ 900 million pledged by the Qatar Airways shareholders and the Cueto and Amaro families, when announcing the Chapter 11 request, on May 26. The contribution corresponds to the first tranche (the “C”) of the DIP financing proposal (Debtor in Possession, for its acronym in English).
Through a statement, the airline indicated that the proposal should be reviewed by the Court, adding that it will also be complemented in the coming weeks with the presentation of two new tranches of financing A and B – those that have priority of payment – and that they will add to section C the US $ 900 million. The total to be raised via DIP is US $ 2,000 million required for its reorganization.
In this sense, in the case of “A” it refers to private interest groups such as companies, shareholders and investment funds that want to enter and be part of the process; while the “B” is tied to the financial support that they can get from the governments of the countries in which the airline operates, but the company begins to discard that idea.
“Given that until now the group companies that are part of the reorganization have not accessed state support, unlike what has happened in much of the rest of the world, the commitment of two of the main shareholders has been fundamental to give operational continuity and to access other sources of financing, “said Roberto Alvo, CEO of Latam Airlines Group.
“If the interest shown in the DIP materializes, state support would not be required by the companies that are part of the process. Although we are making progress in the financing mechanism, we continue to face an extremely complex situation in which we must carry out the necessary transformations to adapt the group to the new post-Covid-19 market conditions, Alvo added.
Meanwhile, the proposal also contemplates an extension of Tranche C for a total amount of US $ 250 million, so that other shareholders can participate independently of Qatar Airways and the Cueto and Amaro families.
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