A bankruptcy judge approved a chapter 11 exit plan for Latam Airlines Group SA that puts $5.44 billion of fresh capital into the Chilean business, moving it closer to ending its pandemic-driven restructuring after two years, the Wall Street Journal reported. Judge James Garrity of the U.S. Bankruptcy Court for the Southern District of New York said the chapter 11 plan resulted from “good faith, arm’s-length negotiations” among Latam and its stakeholders and provides the best available path to resolve its bankruptcy case. He also said the financial restructuring aims to maximize the value of Latam, the largest airline in Latin America, which filed for chapter 11 in New York in 2020 as pandemic restrictions shut down air travel in the region. Latam is handing control to major unsecured creditors including Sixth Street Partners, Strategic Value Partners LLC and Sculptor Capital Management, which agreed to backstop $3.67 billion of a planned capital raise. Current shareholders of Latam, including Delta Air Lines Inc. and Qatar Airways, will guarantee another $1.77 billion in common stock and convertible notes, while retaining minority stakes in the business. Latam said it expects to complete the chapter 11 process by the end of this year and will focus in coming months on the remaining steps to emergence, which include obtaining the necessary legal and regulatory approvals in Chile.
