LATAM Airlines seeks extension of deadline for restructuring plan

FILE PHOTO: Outbreak of the coronavirus disease (COVID-19), in Sao Paulo

By Fabian Cambero

SANTIAGO (Reuters) – LATAM Airlines Group, the region’s largest carrier, said on Wednesday that it had sought to extend until September the deadline to present its restructuring plan as part of the bankruptcy protection process initiated in 2020.

LATAM filed for bankruptcy protection in the United States in May of last year, hammered by the world travel crisis generated by the coronavirus pandemic. At the time, it was the world’s largest airline to take such action due to COVID-19.

A judge had previously ordered the company deliver its restructuring plan by the end of June, and the company has said it hopes to wrap up the process in 2021.

“The extension request is a common alternative contemplated within the process and does not modify the intention of the LATAM group to exit Chapter 11 by the end of this year,” the firm said in a statement.

Latam also told Chilean securities regulators it has requested a second disbursement for $500 million under the DIP Credit Agreement (Debtor-In-Possession). The airline said the additional funds were necessary given “the extension of the health and mobility restrictions imposed by the authorities in the different countries in that the Company operates, as well as the analysis of the Company’s liquidity projection “.

The company also received a $1.15 billion debtor-in-possession loan in October last year.

Earlier on Wednesday Latam said it expects to ramp up its June operations to 36% of their pre-coronavirus pandemic levels, bolstered by the quickening pace of vaccination in some countries in the region.

“All markets show projections higher than those of the previous month,” the company said in the statement.

LATAM, headquartered in Santiago, also operates in Brazil, Chile, Colombia, Ecuador and Peru, as well as international operations throughout Latin America, Europe, the United States and the Caribbean.

(Reporting by Fabian Cambero, writing by Dave Sherwood; Editing by Marguerita Choy)