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Shareholders of Latam Airlines approve reorganization plan and will execute capital increase

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The shareholders of Latam Airlines, the largest air transport group in Latin America, approved on Tuesday to move forward with the reorganization plan designed by the company and which received the approval of the bankruptcy court in the United States in June.

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The decision will allow the company to continue its exit from the process under chapter 11 bankruptcy protection that it filed for in May 2020 due to the impact of the COVID-19 pandemic on its operations.

Beyond being a requirement to get out of Chapter 11, the plan is the way we have to ensure the operational continuity of Latam and its long-term sustainability”, said the CEO of the firm, Roberto Alvo, during the meeting.

The plan contemplates resources for more than US$ 8,000 million through a capital increase, the issuance of convertible bonds and new debt.

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Latam, based in Santiago and subsidiaries in Brazil, Colombia, Ecuador, Peru and the United States, has planned to exit the process during the second half of this year.

After the process, the firm would be left with an estimated cash of more than US$1,500 million, an equity value of US$7,355 million and an estimated net debt of US$6,645 million, Alvo detailed.

The executive said that the industry is currently facing challenges associated mainly with fuel prices and the conflict in Ukraine, the devaluation of currencies and inflationary pressures.

As of June, the airline operated at 74% of its capacity compared to the same month in 2019, before the pandemic, he said.

Source: Gestion

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