Qatar Airways has signed an agreement (Subscription Agreement) which allows the Doha-based carrier to acquire up to 10% of LATAM Airlines Group’s total shares, which can be acquired through an increase in capital.
As allowed in the subscription agreement, LATAM Airlines Group will hold an Extraordinary Shareholders Meeting no later than 2 September, 2016 to propose a capital increase to the amount of US$613 million through the issuance of new shares at a price of US$10 per share.
The announcement was made at the Farnborough International Air Show, by both airlines’ CEOs: Akbar Al Baker, group chief executive of Qatar Airways and Enrique Cueto, CEO of LATAM Airlines Group.
“LATAM represents an exciting opportunity to invest and support the development of our long-term relationship. As a leading airline in Latin America, and key member of oneworld, this investment provides potential opportunities for Qatar Airways’ global network, alongside our successful investment in IAG,” said Al Baker.
Cueto commented: “We are proud to announce Qatar Airways as a new shareholder of LATAM, reaffirming our bond as existing members of the oneworld alliance. This investment recognises LATAM’s achievements and supports our project for the future. In addition to strengthening our financial position, it will allow us to explore new opportunities for connectivity with Asia and the Middle East, as well as other potential areas of cooperation.”
The companies expect the transaction to be completed within the fourth quarter of 2016. Qatar
Airways was advised by HSBC Bank plc, Weil, Gotshall & Manges LLP and Carey whilst LATAM Airlines Group S.A. was advised by JP Morgan, Claro & Cía y Sullivan & Cromwell.