Latam Airlines revises now impaired class 1 RCF claims

Chicago, May 4 – Latam Airlines Group, SA submitted a proposed supplement to its disclosure statement related to the treatment of class 1 revolving credit facility claims, according to a filing with the U.S. Bankruptcy Court for the Southern District of New York on Wednesday.

Previously, the class was unimpaired and considered a non-voting class, but now the class will be impaired and entitled to vote.

Certain of the debtors were borrowers under a $600 million revolver which was fully drawn and matured on March 29.

The plan was for the revolver to be amended and extended and serve as a source of new financing for the debtors’ go-forward plan and their operations after emergence from Chapter 11.

However, sufficient commitments have not been obtained to provide the funding necessary for the amendment and extension.

It is more likely now that commitments for class 1a treatment and exit loans will be closer to $500 million.

The debtors expect to have $100 million of revolving tranche B exit loans pursuant to the class 1b treatment.

Votes for this class are due by May 10.

The confirmation plan hearing is May 17 to 18.

Latam Airlines is a Santiago, Chile-based airline. The company filed bankruptcy on May 25, 2020 under Chapter 11 case number 20-11254.

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