LATAM investors seek $ 1.5 billion loan

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A group of investors from the LATAM Airlines group are seeking a loan of up to $ 1.5 billion to help the struggling airline. As we know, last month, LATAM filed for Chapter 11 bankruptcy protection in the United States and is being restructured. Let’s investigate further.

LATAM is seeking a loan of up to $ 1.5 billion. Photo: Getty Images

Which investors are involved?

According to Reuters, the investor group includes Blackrock Inc, Macquarie, HSBC Bank and Chilean company Moneda Asset Management. This group is looking for a loan between 1 billion and 1.5 billion.

This amount would be in addition to the additional funding pledged by Qatar Airways and Grupo Cueto. When LATAM filed for Chapter 11, the carrier said Grupo Cueto and Qatar Airways, two of the largest investors, had agreed to provide funding of $ 900 million. Meanwhile, LATAM said the goal was to raise up to $ 2.5 billion to support South American operations.

Besides, Delta agreed to pay $ 62 million in penalties after refusing to buy four A350s from LATAM.

All branches of LATAM, except those in Brazil, Argentina and Paraguay, are currently subject to Chapter 11 filing in the United States. While the future of LATAM Argentina and LATAM Paraguay is currently unknown, LATAM Brazil is excluded from the case because it is looking for help.

LATAM Brazil
LATAM Brazil, LATAM Argentina and LATAM Paraguay are not part of the Chapter 11 bankruptcy filing. Photo: Getty Images

What’s been going on with LATAM lately?

Even though South America has brought most of the air travel to the region to a standstill, LATAM has been in the news a lot. From a collision with a cart in Sao Paulo to the announcement that he will get rid of 19 planes.

This week, LATAM Brazil and Delta Air Lines filed their joint venture agreement with the anti-monopoly regulator in Brazil.

For Jérôme Cadier, CEO of LATAM Brazil, this alliance will allow the transporter to become a healthier, more agile and competitive company. He added,

“The process represents a first step towards the approval of the agreement that was recently signed. Once the necessary authorizations have been obtained, Delta and LATAM will link its routes between North America and South America ”, he said. However, there is no possible approval date at this time.

Meanwhile, there is still some uncertainty as to what will happen with LATAM Argentina. The industry is worried about the future of Argentine carriers.

LATAM bankrupt
LATAM Argentina suffered losses of more than $ 260 million between 2018 and 2019. Photo: Getty Images

What will happen with LATAM Argentina?

LATAM Argentina is not in the process of filing for bankruptcy. You could say that LATAM Argentina has no one to turn to for help.

Argentinian journalist Diego Cabot recently wrote about it, saying the Argentinian sky was turning blue and white – in reference to the colors of Aerolíneas Argentinas. He added,

“Aerolíneas is about to erase Austral’s red. He will do so by the end of the year when the two companies merge. Flybondi yellow is in emergency mode, and JetSmart and LATAM are in doubt at the moment. “

Currently, Argentina bans all international operations until September. Meanwhile, domestic flights could return during the third week of July, but there is a catch: Buenos Aires will only have one airport, Ezeiza International, and it is the central hub of Aerolíneas.

In recent years, LATAM Argentina has had appalling financial results. In 2018 he lost $ 132 million and in 2019 he lost an additional $ 133.4 million. For 2020, before the coronavirus, the airline expected to have another year of losses.

With the worst crisis in the history of the airline industry, the red numbers will be even more significant. Meanwhile, LATAM Brazil made $ 356 million in 2018 and $ 185.7 million in 2019. As Diego Cabot added, when the time comes, “There is so much doubt as to which branch will be the priority to save in this emergency. “

What do you think of the future of LATAM Argentina? Let us know in the comments.

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