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The shares of Latam Airlines reacted down this Thursday, after last night Costa Verde Aeronautica, one of the companies through which the Cueto family and other partners control the airline, informed that it will be released from a representative package of the 0.66% of the property.
Latam securities closed the day with a decrease of 0.21% to $ 1,278.80 on the Santiago Stock Exchange, after scoring a session low of $ 1,170.
This is due to the increase in the supply of papers that will be offered by Costa Verde Aeronautica at a minimum price of $ 1,150 per share.
Costa Verde Aeronáutica indicated that it granted an irrevocable mandate to LarraínVial SA Corredora de Bolsa to sell 4 million shares of its property in Latam Airlines, in one or more stock exchange operations, for a minimum amount of $ 4.6 billion.
The operation is part of the mechanisms to raise funds, among other sources, with the objective of providing financing to the airline through the Debtor In Possession (DIP) modality agreed within the framework of the reorganization process in Chapter 11 of the Law of Bankruptcies in the United States, which Latam took advantage of due to the severe effects of the coronavirus crisis on its income.
Costa Verde Aeronáutica is part of the Costa Verde group, which owns 21.46% of Latam’s shares.
On September 18, Judge James L. Garrity of the Southern District Court of New York approved the company’s new DIP financing proposal.
The proposal contemplates a financing of US $ 2.45 billion by the shareholders of Latam Tramos A and C, and the option is left for US $ 750 million, in case any State of the countries where the company operates is willing to support it.
To devise the rescue plan, several days of negotiations were needed. This, after a week ago, Judge Garrity rejected the DIP financing proposals made by the current shareholders of the airline when questioning the conversion of debt into shares.
In the midst of the process of gradual recovery, although it is expected to be slow, of the operations of the airlines, after being hard hit by the restrictions imposed by the authorities and the severe drop in demand due to the coronavirus crisis, the airline reported on Tuesday the resumption of new flights with what it expects to reach between 24% and 26% of its capacity this month.
The operation projected for October, includes the resumption of international routes from Santiago de Chile to Santa Cruz de la Sierra, Guayaquil and Bogotá; from São Paulo, the return of the route to Mexico City; and the restart of the domestic and international air operation from Peru.
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