LATAM Bankruptcy Has Initial Debt of $ 2.2 Billion From 61 Aircraft Only


Latin America’s largest airline, LATAM, filed for Chapter 11 bankruptcy in New York City with $ 2.2 billion in aircraft-related debt as of April 30 from its five largest secured creditors. An updated and complete list of creditors will be released in the coming weeks. LATAM ended 2019 with $ 18 billion in debt and $ 21 billion in assets.

LATAM plans to continue to fly over all of its national units, only some of which are on file. It plans to pay suppliers “on time” for goods and services delivered on or after May 26.

Planes and engines topped its largest guaranteed claims as of April 30. Five companies owed $ 2.2 billion.

61 planes and 56 engines are securitized, including 20 A321s, nine 767s, four 787s, two A350s as well as 26 undisclosed planes.

The secured receivables on the 61 planes and 56 engines come from Wilmington Trust ($ 778 million), Citibank ($ 603 million), Credit Agricole ($ 274 million), Wells Fargo

WFC
($ 277 million) and Natixis ($ 243 million) based on April 30 values, according to a court file.

LATAM owns two-thirds of its 342 planes as of December 31, 2019. Most of the leased planes are narrow-body planes, which make up a larger portion of its fleet.

Ownership composition varies among LATAM’s 80-passenger wide-body aircraft. Overall, it only leases 29 passenger wide-body aircraft, but that includes the majority of A350s, 777s and 787s. In return for this higher rental share, LATAM owns 29 of its 31,767.

There are also 12,767 freighters, all owned except one.

LATAM unsecured trade receivables include Boeing

BA
, aircraft rental companies, the OneWorld Alliance, catering, fuel and air navigation service providers.

The 40 largest unsecured claims as of April 30 were $ 3.4 billion. Most of the unsecured debt is financial, but commercial debt has probably increased. Some may have since been paid in part or in full.

Fuel companies BP, Repsol and World Fuel owed $ 80 million. LATAM owed Argentina and Chile $ 21 million for shipping costs while lessors AerCap, Avolon and BBAM owed $ 20 million.

Boeing owed $ 16 million, Etihad Engineering $ 14 million and Gate Gourmet $ 14 million.

LATAM, which prior to COVID-19 was planning to leave OneWorld on May 1, owed the alliance $ 15 million. He owed $ 9 million to the competition arm of the European Commission.

Smaller debts were owed to other suppliers, including $ 7 million to engine maker CFM, $ 5 million to Collins and $ 5 million to CAE.

Two banks had a potential claim of $ 716 million relating to LATAM frequent flyer miles: $ 549 million from Banco Santander Chile and $ 167 million from Banco de Credito del Perú.



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