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LatinNews Daily - 14 September 2020

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In brief: US court rejects DIP financing request by Chile’s Latam

*A US Judge James L Garrity of the Southern District of New York Court has rejected a proposal by Chile-based airline, Latam Airlines, to secure US$2.2bn in debtor-in-possession financing (DIP) due to objections to Tranche C of the proposal, which was designed to allow creditors to subscribe to shares of the company with the proceeds of the loan payment. Tranche C consists of a commitment to inject US$900m by shareholders Qatar Airways and the Cueto and Amaro families, and includes an upsize of US$250m to enable other shareholders in Chile to subscribe. The remainder of the proposal, including Tranche A, which amounts to US$1.3bn committed by investment group Oaktree Capital Management, has met the standard of being completely fair. However, since the request for approval of DIP funding has to be approved or rejected as a whole, due to the objections to Tranche C, the request has been rejected.