© Reuters. FILE PHOTO: A LATAM Airlines plane carrying a shipment of the Sinovac coronavirus disease (COVID-19) vaccine arrives at Carrasco Airport in Montevideo, Uruguay February 25, 2021. REUTERS/Mariana Greif
MEXICO CITY (Reuters) – Chile’s LATAM Airlines (OTC:) received backing by a majority of its unsecured creditors in its Chapter 11 bankruptcy exit plan, the airline said Friday.
LATAM, which filed for bankruptcy in the United States in 2020 after being hit by the coronavirus-related travel downturn, said around 65% of its low-ranking creditors had backed the plan, which it said was “fair and considered all stakeholders.”
A committee representing junior creditors filed an objection to the restructuring plan in court Monday, calling it “fundamentally flawed” and alleging it would improperly benefit shareholders such as Delta Airlines (NYSE:) at their expense. [L2N2WV2CM]
LATAM Airlines, created in 2012 following the merger of Chile’s LAN with Brazilian rival TAM and with operating units in Chile, Brazil, Colombia and Peru, still has to bring dissenting stakeholders on board.
The plan, in which LATAM hopes to raise $5.4 billion, has also received objections from a Chilean bank representing local bondholders and the U.S. Department of Justice’s bankruptcy watchdog.
The airline’s lawyers will ask a New York judge to approve its proposal in court May 17.
“LATAM continues to aim to complete the process and exit from Chapter 11 in the second half of 2022,” the airline said in a statement.