LATAM Brazil follows parent in bankruptcy filing

[caption id="attachment_85887" align="alignright" width="400"] LATAM Cargo recently transported masks from China to Brazil. Photo courtesy of LATAM Cargo.[/caption] LATAM Airlines Group’s Brazil-based affiliate is filing for reorganization and debt restructuring in the U.S. under Chapter 11 bankruptcy, joining its parent company and affiliates in the U.S., Chile, Peru, Colombia and Ecuador. The Chile-based LATAM filed for bankruptcy in May , citing a severe impact from the COVID-19 crisis. While passenger traffic has borne the brunt of the pandemic-induced decline in operations, LATAM Cargo reported a 10.9% year-over-year traffic decline in revenue tonne kilometers (RTKs), to 248 million RTKs for June, and an 11.4% YoY decline for the first half of 2020, to 1.55 billion RTKs. In a statement regarding this week’s Chapter 11 filing from LATAM Brazil, the company said the procedure is “a natural step in light of the continuing COVID-19 pandemic and will facilitate access to proposed [debtor-in-possession] financing.” The parent company said it has secured $2.2 billion across multiple tranches of DIP financing that must now be reviewed and approved by the bankruptcy court, with an upsize of $250 million available to shareholders in Chile, once it has been approved by the courts. In the meantime, under Chapter 11, the airline group and its subsidiaries have continued to operate and will continue to do so normally during the process, the company said. LATAM has continued to transport personal protective equipment into Brazil under a series of 40 flights arranged by the Brazilian government to transport masks and other relief supplies from China, LATAM Cargo said in a press release. With more than 1.7 million confirmed COVID-19 cases as of July 10, according to the World Health Organization, Brazil trails only the U.S. in overall number of cases globally.

LATAM Brazil follows parent in bankruptcy filing

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LATAM Brazil follows parent in bankruptcy filing

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