The purpose of this second amendment to the RSA is to incorporate as parties to the RSA the current members of the Ad Hoc Group of Bondholders represented by White & Case LLP (“W&C”). These members of the Ad Hoc Group of Bondholders include holders of the unsecured U.S. bonds issued by LATAM Finance Ltd. due April 2024, in the principal amount of US$700 million, and holders of the unsecured U.S. bonds issued by LATAM Finance Ltd. due March 2026, in the principal amount of US$800 million.
Pursuant to this second amendment to the RSA, these members of the Ad Hoc Group of Bondholders have agreed, among other things: to endorse LATAM’s Plan of Reorganization described by the RSA, to instruct the Indenture Trustee of the LATAM 2024 Bonds and the LATAM 2026 Bonds to withdraw its objection to the Debtors’ Disclosure Statement and to not take any further action inconsistent with the Plan of Reorganization, and to instruct W&C to withdraw its motion for substantial contribution that was filed with the Bankruptcy Court. Moreover, the Ad Hoc Group of Bondholders has agreed to settle its objections to the Debtors’ Plan of Reorganization, Disclosure Statement, and other pending motions.
For its part, LATAM has agreed, among other things, to pay on the effective date of the Plan of Reorganization, certain legal and professional fees of the Ad Hoc Group of Bondholders represented by W&C subject to certain limits.
The Plan of Reorganization filed by LATAM at the end of last year constitutes the path to emerge from its Chapter 11 proceedings, in compliance with U.S. and Chilean law. Prior to the execution of this second amendment, the RSA already had the support of creditors representing more than 70% of LATAM's outstanding claims, bondholders representing approximately 48% of LATAM Bonds 2024 and LATAM Bonds 2026, and certain shareholders holding more than 50% of LATAM's common stock. Now, with the execution of this second amendment to the RSA, LATAM’s Plan of Reorganization has the support from over 67% of the LATAM Bonds 2024 and LATAM Bonds 2026.
Upon completion of the Chapter 11 proceedings, LATAM will emerge stronger, with a much more robust capital structure than prior to the pandemic, allowing it to continue to drive the reactivation of operations and sustainability initiatives.
Tags: LATAM Group
