June 11, 2020 / 9:02 PM / 23 days ago

LATAM Airlines bondholders in talks to supply up to $1.5 billion loan, sources say

FILE PHOTO: The departures area of Lan airlines is seen empty inside the international airport, during an indefinite strike of the Cabin Crew Union of LAN Express, a subsidiary of the Chile-based LATAM Airlines group, Santiago, Chile April 10, 2018. REUTERS/Rodrigo Garrido

SAO PAULO (Reuters) - A group of bondholders of LATAM Airlines Group SA (LTM.SN) is in talks to supply up to $1.5 billion in a debtor-in-possession loan within the Chapter 11 proceeding in the United States, two people with knowledge of the matter said on Thursday.

Bondholders including Blackrock Inc (BLK.N), Australia’s Macquarie Group (MQG.AX), HSBC (HSBA.L) and Chile’s Moneda Asset Management, are informally discussing the issue with investment bank Moelis & Co (MC.N).

The exact value of the DIP loan will be defined during the talks, but it is expected to be within the $1 billion to $1.5 billion range, the sources added.

LATAM, the bondholders and Moelis did not immediately comment on the matter. Blackrock declined to comment.

LATAM filed for U.S. bankruptcy protection last month, aiming to restructure $18 billion in debt. It was the world’s largest airline to date to seek an emergency reorganization due to the coronavirus pandemic.

The company said at the time its shareholders Cueto Group and Qatar Airways had committed to supplying $900 million in additional financing, but that it aimed to raise up to $2.5 billion to support operations.

(This story corrects to say Moelis is engaging in informal discussions with bondholders, was not formally hired, in second paragraph)

Reporting by Tatiana Bautzer, Editing by Rosalba O'Brien

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