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Latam Airlines Nears Bankruptcy Amid Merger Deal

By  |  November 25, 2021

Latam Airlines is close to launching a chapter 11 exit strategy backed by some unsecured creditors as it vies to fend off a competitor’s efforts to build support for a proposed business combination, reported Wall Street Journal.

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    The Chilean airline is nearing a restructuring deal with large unsecured creditors and certain shareholders that revolves around an equity sale to recapitalize the business and ease an exit from bankruptcy, according to the people familiar with the matter.

    Latam’s plan, if approved, would also fend off merger overtures from Brazilian peer Azul Linhas Aéreas Brasileiras SA, which has been pushingto combine the two companies. Azul isn’t giving up and has been seeking buy-in from Latam bondholders for an alternative restructuring premised on a tie-up, people familiar with the matter said.

    A Latam representative said the company is looking to file its reorganization plan, developed with its key stakeholders, by Friday.

    “We believe it represents a strong, equitable path forward that will position Latam for success well into the future,” the Latam representative said.

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