The LATAM Airlines Group has announced a new disbursement of USD200 million under its Debtor-in-Possession (DIP) Credit Agreement.
According to a November 10 letter to the Chilean financial markets regulator (Comisión para el Mercado Financiero - CMF) shared with the US Securities and Exchange Commission (SEC), the payment will be made in full by a group of financiers composed of Oaktree Capital Management, L.P., Apollo Management Holdings, L.P. and certain funds, accounts, and entities advised by them.
They are referred to as the “Tranche B” lenders who have committed to providing financing of up to USD750 million to LATAM. Their financing proposal – the “Tranche B Amendment” to the DIP Credit Agreement – was approved by the US Bankruptcy Court of the Southern District of New York on October 18 after it was given the nod by the LATAM Board on September 29, 2021.
On November 10, the Tranche B Amendment was subscribed and thereby incorporated into the DIP Credit Agreement, enabling the draw of USD200 million, the airline group said. Under the credit agreement, LATAM already has access to “Trance A” financing of USD1.3 billion and “Tranche C” financing of USD1.15 billion. To date, USD1.65 billion have been drawn from Tranches A and C.
The LATAM Airlines Group and its affiliates in Chile, Colombia, Ecuador, the US, Peru, and Brazil have been under US Chapter 11 bankruptcy protection since May 2020. The loans are to be used for the continuation of businesses; maintain business relationships with vendors, suppliers, carriers, and customers; make payroll; make capital expenditures; and pay the costs of administration of their estates and satisfy other working capital and general corporate purposes of the debtors.
