LATAM wins approval for USD2.4B financing

SANTIAGO (AFP) – LATAM Airlines said it won approval on Friday for a USD2.45 billion bankruptcy loan package to help it emerge from the world travel crisis caused by Covid-19.

The United States (US) bankruptcy court approved the package after insisting the Santiago-based carrier change an earlier proposal which would have given it an option of repaying much of the debt in new stock instead of cash.

“The decision of Judge James L Garrity allows the group access to the USD2.45 billion required to face the impact of Covid-19,” the airline said in a statement.

The revised plan was presented to the court on Thursday after Garrity rejected the airline’s earlier USD2 billion plan.

Latin America’s biggest airline filed for Chapter 11 bankruptcy in May after continent-wide stay-at-home measures to contain the virus forced it to reduce its operations by 95 per cent.

Chapter 11 proceedings allow a company that is no longer able to repay its debt to restructure under court supervision without pressure from creditors.

In July, the Brazilian-Chilean airline said it would lay off at least 2,700 staff to cope with the fallout.

A Latam airlines plane sits on the tarmac at Santiago International Airport, in Santiago. PHOTO: AFP