Before Presented a judicial recovery plan On Friday 26th, by to complete, which includes a US$8.19 billion (45.9 billion R$) investment in the group, Azul should pull out of its bid to buy out the competitor. Evaluation blue He told LATAM that it has become very expensive to invest in Latin America, especially with the scenario of the fourth wave of Covid, which could paralyze the international air market again. condition Azul head, John Rodgerson.
“If the world turns and we have a chance (To buy from Latin America), let’s look. But under these circumstances, we will not (new offer). It was expensive, and the essence of the company did not change. The executive said salary costs, for example, remain the same.
Rodgerson said that Azul made a bid to take control of the challenger. The plan provided for the investment of about 5 billion US dollars by some creditors and was chaired by it Mollis & Co..
However, the executive says he believes Latam’s plan may face obstacles in US justice, where the operation is taking place. This is because Latin American shareholders will have preference in buying convertible stocks and bonds.
This Saturday morning, the 26th, however, the chief of LATAM, Roberto Alvo, He stated that the proposal provides “equal treatment of stakeholders”. “It allows the participation of large and small creditors through the remuneration transferred (in stock),” added the Executive.
Latam’s plan provides for an offer of stock purchase rights in the amount of US$800 million, which will be open to shareholders. Three classes of convertible debentures will also be issued, which will be offered preferentially to the group of shareholders and, accordingly, to certain creditors. These bonds should add up to $4.64 billion USD.
The group is also expected to raise $500 million in a new revolving line of credit and about $2.25 billion in debt financing through new resources, which could be a new term loan or new bonds.
Hard hit by the epidemic, it was Latam, the company operating in the Brazilian domestic market, that suffered the most from the crisis. This is because it has a larger international operation than its competitors. The group filed for bankruptcy protection (Chapter 11) in New York at the end of May 2020, the Brazilian unit of the company complied with the application after 40 days.
According to Roberto Alvo, Latam expects to leave the judicial reorganization in mid-2022. The company’s plan will be evaluated by US courts on January 27. After that, the company will have an exclusive period to negotiate the approval of the plan with the creditors.
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