A group of Latam Airlines Group SA’s creditors said they are prepared to provide alternative financing if a bankruptcy judge rejects a financial lifeline from another creditor group, WSJ Pro Bankruptcy reported. The splinter group of creditors, which includes Pentwater Capital Management LP, Invictus Global Management LLC and Avenue Capital Group, said it is ready to backstop $400 million of a rights offering and roughly $3.27 billion in the sale of convertible notes. The creditors, whose unsecured debts include lease claims and unsecured notes maturing in 2024 and 2026, said their proposal would increase the restructuring plan’s equity value to $7.79 billion from $7.61 billion, according to the commitment letter and related materials viewed by The Wall Street Journal. The offer is an alternative to an existing financing deal proposed by another group of creditors including Sixth Street Partners that Latam is hoping to get court approval for in order to end the bankruptcy brought on by the COVID-19 pandemic. Since the current offer was presented in November, dissenting creditors, including the holders providing the new deal, have contended that Latam is paying an unreasonable amount of fees to secure the funding it needs.
