Moody's Investors Service, (Moody's) has downgraded LATAM Airlines Group S.A (LATAM)'s corporate family rating to Ca from B1. The Baa2 rating on LATAM Pass Through Trust 2015-1A and Ba1 rating on LATAM Pass Through Trust 2015-1B are unchanged and remain on review for downgrade. Subsequent to today's actions, LATAM's CFR will be withdrawn shortly following the filing for Chapter 11.
Latam Airlines Group (NYSE: LTM) has filed for Chapter 11 protection in New York as South America's largest carrier tries to work through a drop in demand caused by the COVID-19 pandemic. The airline said it has received $900 million in debtor-in-possession financing, funds that allow it to sustain operations while in bankruptcy, from existing shareholders the Cuetos and Amaro families, as well as from Qatar Airways. Airlines around the globe have been hard hit by the pandemic, and Latin American airlines in particular have suffered due to bans on international travel.
Chile's LATAM Airlines Group SA
Provisions of the bankruptcy protection will not have an impact on LATAM Airlines' (LTM) passenger and cargo operations.
LATAM Airlines Group S.A. ("LATAM") (NYSE: LTM; SP IPSA: LTM) and its affiliates in Chile, Peru, Colombia, Ecuador and the United States today initiated a voluntary reorganization and restructuring of their debt under Chapter 11 protection in the United States with the support of the Cueto and Amaro families and Qatar Airways, two of the largest shareholders of LATAM. In light of the effects of COVID-19 on the worldwide aviation industry, this reorganization process provides LATAM with an opportunity to work with the group's creditors and other stakeholders to reduce its debt, access new sources of financing and continue operating, while enabling the group to transform its business to this new reality.
South America's largest carrier filed for U.S. bankruptcy protection on Tuesday (May 26). The move by LATAM Airlines comes just weeks after Colombia's Avianca went bust. But while Avianca had undergone management turmoil and losses, Chile's LATAM had posted profits for the last four years of more than $700 million. LATAM CEO Roberto Alvo tried to reassure stockholders. "I want to be clear. Chapter 11 is not about liquidation, bankruptcy or insolvency. On the contrary, it is an opportunity to reorganize debt and consequently to preserve the LATAM Group, as well as the workers and collaborators, as much as possible. If we have chosen to take this decision, it is because we are committed to continue flying." Latin American governments have been reluctant to bail out their airlines - a sharp contrast to the help provided by European and U.S. authorities to their carriers. Chile's Economy Minister Lucas Palacios said on Tuesday he would not rule out a bailout, but also didn't propose one. In the lead-up to the bankruptcy filing, LATAM laid off 1,800 employees. The carrier said it raised up to $900 million from major shareholders to support operations through its bankruptcy reorganization. LATAM also said it has $1.3 billion in cash on hand.
Rating Action: Moody's downgrades ratings of one or more classes for 41 EETC Series in review of substantial majority of its EETC ratings portfolio. Global Credit Research- 06 May 2020. New York, May 06, ...
A bullish pronouncement from JPMorgan's CEO just helped double the share price of bankrupt Hertz.
Weak passenger revenues are likely to have hurt LATAM Airlines' (LTM) Q1 performance.
Rating Action: Moody's downgrades ratings of one or more classes for 41 EETC Series in review of substantial majority of its EETC ratings portfolio. Global Credit Research- 06 May 2020. New York, May 06, ...
Latin America’s largest carrier Latam Airlines has filed for bankruptcy protection, the second airline in the region to fall victim this month to the coronavirus crisis. Latam made a Chapter 11 bankruptcy filing late on Monday in a New York court, saying it intended to keep flying passengers and cargo, subject to travel restrictions and demand, while it restructures. A string of travel industry groups around the world have sought protection from creditors or government bailouts as the Covid-19 crisis wreaks havoc on the sector.
(Bloomberg) -- Latam Airlines Group SA, Latin America’s largest air carrier, sought bankruptcy court protection in New York after the Covid-19 pandemic grounded flights across the region.The Chapter 11 petition allows Latam to keep operating while the Chilean carrier works out a plan to pay creditors and turn around the business. Latam, whose shareholders include Chile’s Cueto family and Delta Air Lines Inc., is operating on a reduced schedule and has commitments for a bankruptcy loan of as much as $900 million.The money is coming from shareholders including the Cuetos, the Amaro family and Qatar Airways, according to a company statement. Latam also has about $1.3 billion in cash on hand.Airlines the world over -- and those in Latin America in particular -- have been hit hard by the coronavirus outbreak, which triggered travel bans and made people reluctant to fly. Avianca Holdings SA, the largest air carrier in Colombia, filed for Chapter 11 bankruptcy earlier in May, burdened by the sharp drop in fliers and its own onerous debt load.Latam’s affiliates in Brazil, Paraguay and Argentina aren’t part of the bankruptcy case, which was filed in the Southern District of New York.Still, the impact will be felt widely, with Santiago-based Latam previously serving more than 70 million passengers a year on more than 300 aircraft. It also carried more than $7 billion of debt.Latam has already eliminated more than 1,850 jobs in Chile, Colombia, Ecuador and Peru in recent weeks from its global workforce of about 40,000 people, after cutting 95% of its passenger operations. In some bankruptcy scenarios, an airline can reject aircraft leases, and Latam has more than 20 jetliners on order from Airbus SE and half a dozen from Boeing Co.“Exceptional circumstances have led to a collapse in global demand and has not only brought aviation to a virtual standstill, but it has also changed the industry for the foreseeable future,” Chief Executive Officer Roberto Alvo said in a statement.Latam listed assets of more than $21 billion and total liabilities of almost $18 billion in its bankruptcy petition.So far, Latam hasn’t had access to government bailout packages designed help offset virus-related distress. Talks are underway with governments in Chile, Brazil, Colombia and Peru about additional financing and assistance, the airline said.The Chilean government will evaluate the “convenience and opportunity to contribute to the success of Latam’s process,” the Finance Ministry said in a statement Tuesday.Brazilian BanThe task was made more urgent this past weekend by U.S. President Donald Trump’s order to restrict non-U.S. citizens arriving from Brazil to slow the spread of the coronavirus. Brazil accounts for about a third of Latam’s revenue.Latam traces its roots to Lan Airlines, founded in Chile in 1929 and privatized in 1989 during the last years of the Pinochet dictatorship. Latam was born in 2012 after Lan announced plans to merge with Tam for about $3.3 billion two years earlier.The Cueto family -- which is Latam’s largest shareholder and holds two seats on its board of directors -- acquired a stake in 1992 and control of the business in 1994. At that time, another major shareholder was current Chilean President Sebastian Pinera, who sold his own 26% stake early in his first term as president in 2010.Last year, Latam signed a $2.25 billion pact to sell a stake to Delta Air Lines, expanding Delta’s footprint in South America. The Chilean carrier has been planning to gradually ramp up flights over the next two months, with the goal of reaching 18% of pre-crisis capacity in July.Latam retained Cleary Gottlieb Steen & Hamilton as legal counsel, FTI Consulting Inc. as financial adviser and PJT Partners Inc. as investment banker.The case is Latam Airlines Group SA, 20-11254, U.S. Bankruptcy Court for the Southern District of New York (Manhattan)(Updates with Chilean Finance Ministry comment in the 11th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The likes of Delta (DAL) and United Airlines (UAL) are looking at ways to promote cleanliness in a bid to encourage passengers to resume flying.
The filing highlights the financial weakness of Latin America's carriers, following a similar bankruptcy earlier this month by the region's No. 2 airline, Avianca Holdings
Following regional rival Avianca Holdings's footsteps, LATAM Airlines, the largest carrier in Latin America, is reorganizing and restructuring debt under court-supervised bankruptcy protection in the United States because of the unprecedented downturn in business caused by the coronavirus.Today's filing for Chapter 11 bankruptcy covers LATAM Airlines Group (NYSE: LTM), headquartered in Santiago, Chile, as well as its affiliates in Colombia, Peru, Ecuador, and the U.S., but not those in Argentina, Brazil, and Paraguay. LATAM said the restructuring will result in a smaller airline, but it will continue to operate as normal, with no interruption in passenger or cargo service, reservations, or its loyalty program. Downsizing is something all airlines are trying to figure out how to do in the face of a pandemic that has wiped out travel demand.Qatar Airways and the family of chairman Ignacio Cueto, two of the company's largest shareholders, are fronting $900 million in debtor-in-possession financing. The capital injection will help LATAM, which has $1.3 billion in liquid reserves, pay vendors for services, and puts the two shareholders at the head of the line for claiming assets if the airline is forced to liquidate later."LATAM entered the COVID-19 pandemic as a healthy and profitable airline group, yet exceptional circumstances have led to a collapse in global demand and has not only brought aviation to a virtual standstill, but it has also changed the industry for the foreseeable future," LATAM Chief Executive Robert Alvo said in a statement. "We have implemented a series of difficult measures to mitigate the impact of this unprecedented industry disruption, but ultimately this path represents the best option to lay the right foundation for the future of our airline group. We are looking ahead to a post-COVID-19 future and are focused on transforming our group to adapt to a new and evolving way of flying, with the health and safety of our passengers and employees being paramount."The airline group said it is in discussions with the governments of Chile, Brazil, Colombia, and Peru for emergency aid and invited other shareholders to provide extra financing to protect jobs and minimize disruption.Last year, LATAM launched 26 new routes and transported a record 74 million passengers.The bankruptcy complicates LATAM's pending joint venture with Delta Air Lines (NYSE: DAL). The Atlanta-based carrier is paying $1.9 billion for a 20% stake in LATAM in an effort to expand its footprint in Central and South America, and take business from American Airlines. The two companies are already cooperating on codeshares for passenger travel and earlier this month signed a blueprint for how to integrate operations once they receive approval from regulators. "In the time we have gotten to know one another, we've developed the utmost respect for and confidence in the LATAM leadership team," said Delta CEO Ed Bastian in a statement. "Airlines globally have been devastated by the COVID-19 pandemic, for which no business plan could have adequately prepared. We remain firmly committed to our partnership with LATAM and believe that it will successfully emerge a stronger airline and Delta partner for the long term." LATAM this spring has added new routes and frequencies for cargo customers to meet the surge in demand for perishable foods, medical supplies, and other goods resulting from lost cargo space when airlines took down most flights in the face of widespread travel restrictions. LATAM's 11 Boeing 767-300 freighters in its fleet. The airline has also repurposed several passenger aircraft for cargo mode, using special sacks to hold cargo in the seats and even tearing out seats to create room for cargo in the passenger cabin.LATAM's bankruptcy foreshadows the difficult road airlines have in downsizing to a level commensurate with extremely low travel demand, minimize drawdowns of cash reserves until travel picks up, and then having enough employees and other resources to ramp up schedules when people are ready to fly again. The International Air Transport Association on Monday said airlines collectively a 28% increase in debt levels to $550 billion that could hamper their ability to recover.Over the weekend, Lufthansa Airlines' parent company agreed to a $10 billion bailout from the German government. Israeli flag carrier El Al recently said it could go under without government aid, while Virgin Australia has also filed for bankruptcy protection and several regional carriers in the U.K. and the U.S. have shut down operations. Photo by Maria Tyutina from Pexels.See more from Benzinga * PPP forgiveness Rules Clarified As First Recipients Face Payments' Exhaustion * Cross-Border Summit Hits On International Trade, Cargo Visibility, USMCA * Air France-KLM bids adieu to A380 jumbo jet(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Moody's Investors Service, (Moody's) has downgraded LATAM Airlines Group S.A (LATAM)'s corporate family rating to Ca from B1. The Baa2 rating on LATAM Pass Through Trust 2015-1A and Ba1 rating on LATAM Pass Through Trust 2015-1B are unchanged and remain on review for downgrade. Subsequent to today's actions, LATAM's CFR will be withdrawn shortly following the filing for Chapter 11.
Suppressed air-travel demand upsets LATAM Airlines' (LTM) April traffic data.
Shares of Latam Airlines Group (NYSE: LTM) fell 34% on Tuesday after the Latin American airline filed for Chapter 11 protection in New York. The pandemic has created an extraordinarily tough operating environment for airlines, and it seems unlikely the current equity holders of Latam will get much, if anything, from the reorganization. Airlines around the globe have been hard hit by the COVID-19 pandemic, and Latin American airlines in particular have suffered due to bans on international travel.
Chile's LATAM Airlines Group SA on May 26 became the largest carrier so far to seek an emergency reorganisation during the pandemic. British regional airline said on March 5 it had entered into administration as the already struggling carrier failed to withstand the plunge in travel demand caused by the coronavirus outbreak. The Swedish airline applied for a court-administered reorganisation after demand plunged due to the spread of the novel coronavirus, it said on its website on April 6.
Latam Airlines Group S.A. (LTM) and its affiliates in Chile, Peru, Colombia, Ecuador and the U.S. have filed for Chapter 11 bankruptcy protection due to the impact of the coronavirus pandemic on the global aviation industry.The Latin American airline said that it has secured up to $900 million in financing from the Cueto and Amaro families and Qatar Airways, two of its largest shareholders. As of the Chapter 11 filing, the group had about $1.3 billion in cash on hand.During the debt restructuring process, Latam and its affiliates will continue flying as conditions permit, the airline said.Commercial airline travel has fallen off a cliff due to coronavirus-induced lockdown restrictions forcing many global airlines around the world to ground the majority of their fleets, suspend aircraft deliveries, and streamline operations.Deutsche Lufthansa AG (DLAKY) on Monday announced that it has reached an agreement with the German government on a €9 billion ($9.8 billion) bailout package, while earlier this month Colombian Avianca Holdings (AVH) filed for bankruptcy protection."Latam entered the COVID-19 pandemic as a healthy and profitable airline group, yet exceptional circumstances have led to a collapse in global demand and has not only brought aviation to a virtual standstill, but it has also changed the industry for the foreseeable future," said Roberto Alvo, CEO of Latam. "We have implemented a series of difficult measures to mitigate the impact of this unprecedented industry disruption, but ultimately this path represents the best option to lay the right foundation for the future of our airline group.”Latam and its affiliates said that they are also in discussions with their respective governments of Chile, Brazil, Colombia and Peru to seek sourcing additional financing, protect jobs where possible and minimize disruption to its operations.Shares in the air carrier fell $4.8% to $2.58 as of Friday in U.S. trading taking the year-to-date plunge to 75%.TipRanks data shows that three out of five analysts releasing a review over the past month downgraded the stock’s rating to Hold. The $3.40 average analyst price target implies 32% upside potential in the shares in the coming 12 months. (See Latam Airlines stock analysis on TipRanks).Related News: Ryanair Cuts Traffic Target By Almost 50% For Coming Year, Seeks To Reduce Boeing Plane Deliveries Boeing Gets No Orders in April, Customers Cancel 737 MAX Jets Colombian Carrier Avianca Files for Bankruptcy Protection Due to Coronavirus Woes More recent articles from Smarter Analyst: * Billionaire Ackman Exits Berkshire Hathaway, Blackstone To Fund Opportunities * HBO Max Launches, But Not Yet Available on Amazon, Roku Platforms * Apple Snaps Up AI Startup Inductiv, As Analysts Boost PTs On Store Reopenings * Microsoft Seeks $2B Stake In India’s Jio Platforms- Report