NEW YORK (Reuters) – A New York court has approved a plan by Latin America’s largest airline, LATAM Airlines, to emerge from bankruptcy under U.S. law, the carrier said on Saturday.
“We are very satisfied with the confirmation by the judge of our restructuring plan. This is a very important milestone in the Chapter 11 release process and we will continue to work hard to conclude the remaining milestones over the coming months,” company CEO Roberto Alvo said in a statement. .
The plan includes an injection of $8 billion, which LATAM said last year would come from a combination of fresh capital, convertible bonds and debt.
Under US bankruptcy law, Chapter 11 allows a company unable to pay its debts to reorganize without pressure from creditors.
Created in 2012 by the merger of Chilean airlines LAN and Brazil’s TAM, LATAM filed for Chapter 11 protection in May last year after continent-wide lockdowns to contain the coronavirus forced it reduce its operations by 95%.
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In September, a New York court approved a $2.45 billion loan to help LATAM, which had laid off thousands of workers and closed its Argentinian subsidiary as part of cost savings.
LATAM was expected to have total debt of approximately $7.26 billion and cash of $2.67 billion when the plan was approved.
The company expects to emerge from bankruptcy by the second half of 2022, it said in its statement.
LATAM has subsidiaries in Chile, Colombia, Ecuador, Peru and the United States.