LATAM Airlines (LTM) F-1Registration statement (foreign)

As filed with the Securities and Exchange Commission on August 12, 2022

Registration No. 333-                

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form F-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

LATAM Airlines Group S.A.

(Exact Name of Registrant as Specified in Its Charter)

LATAM Airlines Group S.A.

(Translation of Registrant’s name into English)

Presidente Riesco 5711, 20^th Floor

Las Condes

Santiago, Chile

Tel.: 56-2-2565-2525

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

CT Corporation System

28 Liberty Street

New York, NY 10005

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)

Copies to:

Approximate date of commencement of proposed sale to the public: From time to time after this registration statement becomes effective.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  ☒

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.  ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

EXPLANATORY NOTE

(NOT PART OF THE PROSPECTUS)

This registration statement on Form F-1 relates to the proposed resale of common shares of LATAM Airlines Group S.A., a company incorporated under the laws of Chile, by the selling shareholders to be set forth herein.

On May 26, 2020, LATAM Airlines Group S.A. (“LATAM”) and 28 affiliates (collectively, the “Initial Debtors”) filed their petitions for relief under Chapter 11 (“Chapter 11”) of title 11 of the United States Code, 11 U.S.C. §§ 101-1532, (as amended, the “Bankruptcy Code”), with the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). On July 7, 2020 and July 9, 2020 (as applicable, the “Subsequent Petition Dates”), nine additional affiliates of LATAM (the “Subsequent Debtors” and together with the Initial Debtors, the “Debtors”) filed their petitions for relief under Chapter 11 of the Bankruptcy Code with the Bankruptcy Court. We refer to these proceedings in this prospectus as our “Chapter 11 proceedings.”

On November 26, 2021, the Debtors filed an initial proposed plan of reorganization under our Chapter 11 proceedings (as it has been and may be subsequently supplemented, revised or amended, or otherwise modified in accordance with its terms, the “Plan of Reorganization” or “Plan”) resulting from the negotiation of a restructuring support agreement (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “Restructuring Support Agreement” or “RSA”), also dated as of November 26, 2021, with an ad hoc group of general unsecured creditors of LATAM and certain of the existing equity holders of LATAM. The Debtors filed the solicitation version of the Plan of Reorganization on March 25, 2022.

In accordance with the RSA, on January 12, 2022 we and the Debtors entered into a backstop commitment agreement with certain shareholders (the “Backstop Shareholders”), which we refer to as the “Shareholder Backstop Agreement,” and certain of our creditors (the “Backstop Creditors”), which we refer to as the “Creditor Backstop Agreement”. The Shareholder Backstop Agreement and the Creditor Backstop Agreement are referred to collectively as the “Backstop Agreements.” Under the Plan, the terms of the Backstop Agreements and the transactions contemplated therein, the Backstop Shareholders, the Backstop Creditors and certain general unsecured creditors of the Debtors will be issued, in a private placement exempt from registration under the Securities Act of 1933, three distinct classes of convertible notes issued by LATAM that may be converted into common shares of LATAM (the “Convertible Notes”). In addition, pursuant to the terms of the Backstop Agreements, the Backstop Shareholders and the Backstop Creditors agreed to backstop up to US$800 million of an issuance of new common stock by LATAM. LATAM has agreed to register such common stock and the common shares issuable upon the conversion of the Convertible Notes for resale in the form of ADSs pursuant to a registration rights agreement to be entered into by and among LATAM, the Backstop Creditors and the Backstop Shareholders (the “Registration Rights Agreement”). See “Certain Relationships and Related Party Transactions—Registration Rights Agreement.”

Since LATAM will seek to have this registration statement become effective as soon as reasonably practicable following the effectiveness of the Plan, this registration statement is drafted in many respects as though the reorganization has already taken place. Therefore, except as otherwise noted or suggested by the context, all information contained in this registration statement relates to LATAM and its subsidiaries following the effectiveness of, and after giving effect to the other transactions contemplated by, the Plan.

In addition, the financial information set forth in this registration statement, unless otherwise expressly set forth or as the context otherwise indicates, reflects the historical consolidated results of operations and financial condition of LATAM and its consolidated subsidiaries for the periods presented. That historical financial information does not reflect, among other things, any effects of the transactions contemplated by the Plan. Thus, such financial information may not be representative of LATAM’s performance or financial condition after the effective date of the Plan.

The information in this prospectus is not complete and may be changed. Neither we nor the Selling Shareholders shall sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED AUGUST 12, 2022

PRELIMINARY PROSPECTUS

LATAM Airlines Group S.A.

Common Shares

and the American Depositary Shares Representing Such Shares

This prospectus relates to the offer and sale from time to time by the selling shareholders identified in this prospectus of up to      of our American Depositary Shares (“ADSs”), each representing                                          common shares of LATAM Airlines Group S.A., and the common shares represented by the ADSs. We expect to apply to list our ADSs on the New York Stock Exchange (“NYSE”) under the symbol “LTM.” The ADSs are expected to begin trading on NYSE on                 , 2022. Our common shares trade on the Santiago Stock Exchange (Bolsa de Comercio de Santiago, Bolsa de Valores or “SSE”) and on the Chilean Electronic Stock Exchange ((Bolsa Electrónica de Chile, Bolsa de Valores or “ESE”), under the symbol “LAN.” On                 , 2022, the last reported sale price of our common shares on the SSE was Ch$                                per common share, which is equivalent to $                 per ADS, based on an exchange rate of Ch$                         to $                         as of                            , 2022.

We have appointed J.P. Morgan Chase Bank, N.A. to act as the depositary for the ADSs (the “Depositary”) representing our common shares, including the Registered Shares, as defined below. The shares registered hereby are held in the form of common shares. Holders of common shares will be able to deposit such shares with the Depositary in exchange for ADSs representing such shares at the ratio of      common shares per ADS. ADSs representing the shares registered hereby will be freely tradeable on the effective date of the registration statement of which this prospectus forms a part.

We are filing the registration statement of which this prospectus forms a part in respect of our obligations under a Registration Rights Agreement, dated                 , 2022, concerning an aggregate of                                               common shares issuable upon the exercise of convertible notes issued to investors identified herein pursuant to the terms of the backstop commitment agreements entered into on January 12, 2022 (as amended from time to time) with such investors (the “Backstop Agreements”). Holders of all such instruments are identified in this prospectus as the “Selling Shareholders” and the aggregate                                          common shares registered hereby as the Registered Shares. Any “Registered Shares” offered and sold in the United States by the Registered Holders on the NYSE will be in the form of ADSs. The Selling Shareholders may also sell common shares not represented by ADSs pursuant to this prospectus in private transactions or other transactions not on the NYSE.

The Selling Shareholders identified in this prospectus may offer the common shares and ADSs from time to time through public or private transactions at fixed prices, at prevailing market prices at the time of sale, at varying prices determined at the time of sale, or at privately negotiated prices. To the extent required, we will provide the specific terms of transactions in the common shares or ADSs in supplements to this prospectus. You should read this prospectus and any applicable supplements carefully before you invest. See “Plan of Distribution.”

We expect that the opening public price of our ADSs on NYSE will be determined by reference to the most recent trading price of our common shares on the SSE, as adjusted for the currency exchange rate at an ADS-to-share ratio of 1 to                  . Thereafter, trades of our ADSs will be made through brokerage transactions on NYSE at prevailing market prices. The Selling Shareholders may, or may not, elect to dispose of Registered Shares represented by ADSs as and to the extent that they may individually determine. See the section entitled “Plan of Distribution.” We will not receive proceeds from any disposition of Registered Shares in the form of ADSs by the Selling Shareholders.

Investing in the ADSs and the common shares involves a high degree of risk. Please see “Risk Factors” beginning on page 11 of this prospectus and the risks described in the 2021 Annual Report which are incorporated by reference herein for a discussion of those risks.

Neither the United States Securities and Exchange Commission (the “SEC”), nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense in the United States.

Prospectus dated                  , 2022

TABLE OF CONTENTS

Neither we nor the Selling Shareholders have authorized anyone to provide you with any information or to make any representations other than as contained in this prospectus or in any free writing prospectuses we have prepared. Neither we nor the Selling Shareholders take responsibility for, or can provide any assurance about the reliability of, any information that others may give you. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the cover of this prospectus. Our business, financial condition, results of operations, future growth prospects and other information in this prospectus may have changed since that date.

This prospectus is not an offer to sell and it is not a solicitation of an offer to buy securities in any jurisdiction in which the offer, sale or exchange is not permitted. The distribution of this prospectus and the offer or sale of the securities offered hereby in certain jurisdictions is restricted by law. This prospectus may not be used for, or in connection with, and does not constitute, any offer to, or solicitation by, anyone in any jurisdiction or under any circumstance in which such offer or solicitation is not authorized or is unlawful. Recipients must not distribute this prospectus into jurisdictions where such distribution would be unlawful.

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ABOUT THIS PROSPECTUS

This prospectus is part of a resale registration statement that we filed with the SEC using a “shelf” registration process. The Selling Shareholders may offer and sell, from time to time, an aggregate of up to                  common shares or ADSs representing such shares under this prospectus. In some cases, we and the Selling Shareholders will also be required to provide a prospectus supplement containing specific information about the Selling Shareholders and the terms on which they are offering and selling our common shares. We may also add, update or change in a prospectus supplement information contained in this prospectus. You should read this prospectus and any accompanying prospectus supplement, and any documents incorporated by reference, as well as any post-effective amendments to the registration statement of which this prospectus is a part, before you make any investment decision. To the extent there is a conflict between the information contained in this prospectus and any applicable prospectus supplement, including the information incorporated by reference, you should rely on the information in the applicable prospectus supplement.

You should rely only on the information contained in this prospectus and any accompanying prospectus supplement, including the information incorporated by reference herein. Neither we nor the Selling Shareholders have authorized anyone to provide you with information different from that contained in this prospectus or any accompanying prospectus supplement, including the information incorporated by reference herein.

The Selling Shareholders may only offer to sell, and seek offers to buy, our common shares in jurisdictions where offers and sales are permitted. The information contained in this prospectus speaks only as of the date of this prospectus.

The Selling Shareholders named herein acquired their shares in accordance with the Plan of Reorganization (as it has been and may be subsequently supplemented, revised or amended, or otherwise modified in accordance with its terms, the “Plan of Reorganization” or “Plan”) filed by LATAM Airlines Group S.A. (“LATAM”) and certain of its subsidiaries, which we refer to, together with LATAM, as the “Debtors,” pursuant to Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) and the terms of the Backstop Commitment Agreements (as defined herein) and the transactions contemplated therein. On June 18, 2022, the Bankruptcy Court entered an order confirming the Plan. See “The Reorganization.” We agreed to register for resale, effective as soon as reasonably practicable following the Effective Date, the common shares owned or expected to be owned as of the date of this prospectus or owned in the future by the Selling Shareholders set forth herein or set forth in the applicable prospectus supplement and in accordance with the terms of the Registration Rights Agreement.

In connection with the Chapter 11 process, the Debtors were required to prepare projected financial information. These projections are not part of this prospectus and should not be relied upon in connection with any offering of our common shares. The projections were not prepared for the purpose of any offering of our common shares and have not been, and may not be, updated on an ongoing basis. The projections reflected numerous assumptions concerning our anticipated future performance and prevailing and anticipated market and economic conditions at the time they were prepared that were and continue to be beyond our control and that may not materialize. Projections are inherently subject to uncertainties and to a wide variety of significant business, economic and competitive risks, including those risks discussed under “Risk Factors” in this prospectus and other risks described in our 2021 Annual Report on Form 20-F for the year ended December 31, 2021 filed with the SEC on March 30, 2022 (the “2021 Annual Report”), which are incorporated by reference in this prospectus. Our actual results will vary from those contemplated by the projections and the variations may be material. As a result, you should not rely upon the projections in deciding whether to invest in our common shares.

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Presentation of Financial Information

In this prospectus, all references to “Chile” are references to the Republic of Chile. This prospectus contains conversions of certain Chilean peso and Brazilian real amounts into U.S. dollars at specified rates solely for the convenience of the reader. These conversions should not be construed as representations that the Chilean peso and the Brazilian real amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated. Unless we specify otherwise, all references to “$”, “US$,” “U.S. dollars” or “dollars” are to United States dollars, references to “pesos,” “Chilean pesos” or “Ch$” are to Chilean pesos. References to “real,” “Brazilian real” or “R$” are to Brazilian real, and references to “UF” are to Unidades de Fomento, a daily indexed Chilean peso-denominated monetary unit that takes into account the effect of the Chilean inflation rate.

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Unless we indicate otherwise, the U.S. dollar equivalent for information in Chilean pesos used in this prospectus is based on the “dólar observado” or “observed” exchange rate published by Banco Central de Chile (the “Central Bank of Chile”) on June 30, 2022, which was Ch$919.97 = US$1.00. Unless we indicate otherwise, the U.S. dollar equivalent for information in Brazilian real used in this registration statement on Form F-1 is based on the average “bid and offer rate” published by Banco Central do Brasil (the “Central Bank of Brazil”) on June 30, 2022, which was R$5.2374 = US$1.00. The Federal Reserve Bank of New York does not report a noon buying rate for Chilean pesos or Brazilian real. Unless we indicate otherwise, the Chilean peso equivalent for information in UF used in this registration statement on Form F-1 and in our audited consolidated financial statements is based on the UF rate published by Central Bank of Chile on June 30, 2022, which was Ch$33,086.83= UF1.00.

We have rounded percentages and certain U.S. dollar, Chilean peso and Brazilian real amounts contained in this prospectus for ease of presentation. Any discrepancies in any table between totals and the sums of the amounts listed are due to rounding.

The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section titled “Risk Factors” and elsewhere in this prospectus, and other risks described in the 2021 Annual Report, which are incorporated by reference in this prospectus. These and other factors could cause results to differ materially from those expressed in the estimates included in this prospectus.

Other Information

Throughout this prospectus, we make numerous references to “LATAM.” Unless the context otherwise requires, references to “LATAM Airlines Group” are to LATAM Airlines Group S.A., the unconsolidated operating entity, and references to “LATAM,” “we,” “us,” “our,” the “group” or the “Company” are to LATAM Airlines Group S.A. and its consolidated affiliates including: Transporte Aéreo S.A. (“LATAM Airlines Chile”), LATAM Airlines Perú S.A. (f/k/a LAN Perú S.A, “LATAM Airlines Peru”), LATAM-Airlines Ecuador S.A. (f/k/a Aerolane Líneas Aéreas Nacionales del Ecuador S.A.), LAN Argentina S.A. (“LATAM Airlines Argentina,” f/k/a Aero 2000 S.A.), Aerovías de Integración Regional S.A., TAM S.A. (“TAM”), TAM Linhas Aéreas S.A. (“LATAM Airlines Brazil”), Transporte Aéreos del Mercosur S.A., LAN Cargo S.A. and its two regional affiliates: Linea Aerea Carguera de Colombia S.A. in Colombia and Aerolinhas Brasileiras S.A. in Brazil. Other references to “LATAM”, as the context requires, are to the LATAM brand which was launched in 2016 and brings together, under one internationally recognized name, all of the affiliate brands such as LATAM Airlines Chile, LATAM Airlines Peru, LATAM Airlines Argentina, LATAM Airlines Colombia, LATAM- Airlines Ecuador S.A. and LATAM Airlines Brazil.

References to “LAN” are to LAN Airlines S.A., currently known as LATAM Airlines Group S.A., and its consolidated affiliates, in connection with circumstances and facts occurring prior to the completion date of the combination between LAN Airlines S.A. and TAM S.A. See “Item 4. Information on the Company—A. History and Development of the Company.” in the 2021 Annual Report incorporated by reference herein.

In this prospectus, unless the context otherwise requires, references to “TAM” are to TAM S.A., and its consolidated affiliates, including TAM Linhas Aereas S.A., which does business under the name “LATAM Airlines Brazil”, Fidelidade Viagens e Turismo Limited and Transportes Aéreos Del Mercosur S.A.

LATAM Airlines Group S.A. and the majority of our affiliates maintain accounting records and prepare financial statements in U.S. dollars. Some of our affiliates, however, maintain their accounting records and prepare their financial statements in Chilean pesos, Argentinean pesos, Colombian pesos or Brazilian real. In particular, TAM maintains its accounting records and prepares its financial statements in Brazilian real. Our audited consolidated financial statements include the results of these affiliates translated into U.S. dollars. The International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board, require assets and liabilities to be translated at period-end exchange rates, while revenue and expense accounts are translated at each transaction date, although a monthly rate may also be used if exchange rates do not vary widely.

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Cautionary Note Regarding Forward-Looking Statements

This registration statement on Form F-1 contains forward-looking statements. Such statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe”, “forecast” or other similar expressions. Forward-looking statements, including statements about our beliefs and expectations, are not statements of historical facts. These statements are based on current plans, estimates and projections, and, therefore, you should not place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. These factors include, but are not limited to:

Forward-looking statements speak only as of the date they are made, and we undertake no obligation to publicly update any of them, whether in light of new information or future events. You should also read carefully the risk factors described in the “Risk Factors” section in this prospectus and in the 2021 Annual Report incorporated by reference herein.

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Risk Factors

This offering and an investment in the ADSs and our common shares involve a significant degree of risk. You should carefully consider the risks described below and the risks described in the 2021 Annual Report which are incorporated by reference herein, together with the financial and other information contained in this prospectus or incorporated by reference in this prospectus, before you decide to purchase the ADSs or our common shares. If any of the following risks actually occurs, our business, financial condition, results of operations, cash flow and prospects could be materially and adversely affected. As a result, the trading price of the ADSs or our common shares could decline and you could lose all or part of your investment.

Risks Relating to Our Emergence from Bankruptcy

Our Chapter 11 Plan of Reorganization is based in large part upon assumptions and analyses developed by us. If these assumptions and analyses prove to be incorrect, our plan may be unsuccessful in its execution.

The implementation of our Plan of Reorganization affects our capital structure and the ownership, structure and operation of the business and reflects assumptions and analyses based on our experience and perception of historical trends, current conditions and expected future developments, as well as other factors that we consider appropriate under the circumstances. Whether actual future results and developments will be consistent with our expectations and assumptions depends on a number of factors, including but not limited to: (i) our ability to change substantially our capital structure, (ii) our ability to obtain adequate liquidity and access financing sources, (iii) our ability to maintain customers’ confidence in our viability as a going concern, (iv) our ability to retain key employees and (v) the overall strength and stability of general macroeconomic conditions. In light of the many uncertainties and risks deriving from developments relating to the spread of COVID-19 and new variants, these factors and their effect on us are highly unpredictable.

In addition, the Plan relies upon financial projections that are necessarily speculative, and it is possible that one or more of the assumptions and estimates that are the basis of these financial forecasts will not result as expected. In our case, the forecasts may be even more speculative than normal because of the many uncertainties we face relating to, among others, macroeconomic conditions in the countries in which the group operates, depressed demand for air travel and travel restrictions imposed by governments as a result of the COVID-19 pandemic, and the time and manner in which COVID-19 vaccines are distributed in the countries in which the group operates. Accordingly, our actual financial condition and results of operations could differ, perhaps materially, from what we have anticipated. Consequently, there can be no assurance that the results or developments contemplated by any plan of reorganization we may implement will occur or, even if they do occur, that they will have the anticipated effects on us or our business or operations. The failure of any such results or developments to materialize as anticipated could materially and adversely affect the successful execution of any plan of reorganization.

Further, the Bankruptcy Court’s Confirmation Order of the Plan is being appealed by certain creditors who argue that the Plan does not satisfy the standards for confirmation under the Bankruptcy Code. Although we are contesting these appeals, there can be no assurance that we will ultimately prevail on the merits or otherwise settle with the appealing parties.

Our historical financial information may not be indicative of our future financial performance.

Our capital structure is being significantly altered under the Plan. Further, implementation of the Plan could materially change the amounts and classifications reported in our consolidated historical financial statements, which do not give effect to any adjustments to the carrying value of assets or amounts of liabilities that might be necessary as a consequence of the confirmation of the Plan of Reorganization.

We may not be able to achieve our stated goals and continue as a going concern.

Following the consummation of our Plan of Reorganization, we continue to face a number of risks, including further depressed demand for air travel and challenging economic conditions as a result of developments relating to the spread of COVID-19 or otherwise. Accordingly, we cannot guarantee that our Plan of Reorganization will achieve our stated goals and permit us to effectively implement our strategy.

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Furthermore, even considering that our debts are being effectively reduced or discharged through the implementation of our Plan of Reorganization, we may need to raise additional funds through public or private debt or equity financing or other various means to fund the group’s business after the completion of our Chapter 11 proceedings. Our access to additional financing for the foreseeable future will likely continue to be limited, if it is available at all. Therefore, adequate funds may not be available when needed or may not be available on favorable terms.

We may be subject to claims that will not be discharged in our Chapter 11 proceedings, which could have a material adverse effect on our financial condition and results of operations.

The Bankruptcy Code provides that the confirmation of a Chapter 11 plan of reorganization discharges a debtor from substantially all debts arising prior to confirmation. With few exceptions, all claims that arose prior to confirmation of the Plan of Reorganization: (i) would be subject to compromise and/or treatment under the Plan of Reorganization and (ii) would be discharged in accordance with the Bankruptcy Code and the terms of the Plan of Reorganization. Any claims not ultimately discharged through a Chapter 11 plan of reorganization could be asserted against the reorganized entities and may have an adverse effect on the business and financial condition and results of operations of the group on a post-reorganization basis.

Risks Relating to our common shares and ADSs

The price of our common shares may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the offering price.

The market price for our common shares may be volatile and may fluctuate significantly in response to a number of factors, most of which we cannot control, including, among others:

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These and other factors may lower the market price of our common shares, regardless of our actual operating performance. In the event of a drop in the market price of our common shares, you could lose a substantial part or all of your investment in our common shares and ADSs.

In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Shareholders may institute securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, we could incur substantial costs and our resources and the attention of management could be diverted from our business.

Sales of our common shares by existing shareholders, or the perception that these sales may occur, especially by significant shareholders, may cause our share price to decline.

Following our emergence from bankruptcy, a substantial portion of our shares are being held by a limited number of holders. Following our emergence, all of the shares distributed in connection with the Plan will be freely tradeable in Chile on the SSE and ESE and may be sold in the United States pursuant to an applicable exemption from registration under the Securities Act or under an effective registration statement, including the registration statement of which this prospectus forms a part. Some of our creditors who receive our common shares in connection with the Plan may sell our shares shortly after emergence for any number of reasons. Other creditors may hold their common shares for the holding period applicable to them under U.S. law and sell immediately after such holding period expires, which could result in further price volatility. In addition, investment firms that are party to certain put and call agreements may hedge their positions by trading our common shares.

If our existing shareholders, in particular our affiliates and significant shareholders, sell substantial amounts of our common shares in the public market, or there is substantial trading in our common shares, hedging activities or perceived perception by the public market that any of these activities will occur, the trading price of our common shares could decline. In addition, sales of these common shares could impair our ability to raise capital, should we wish to do so. Up to                 of our common shares may be sold pursuant to this prospectus by the Selling Shareholders, which represents approximately                 % of our issued and outstanding common shares as of the Effective Date. We cannot predict the timing or amount of future sales of our common shares by Selling Shareholders pursuant to this prospectus, but such sales, or the perception that such sales could occur, may adversely affect prevailing market prices for our common shares.

Trading of our ADSs and common shares in the securities markets is limited and could experience further illiquidity and price volatility.

Our common shares are listed and trade on the SSE and the ESE under the symbol “LAN.” Chilean securities markets are substantially smaller, less liquid and more volatile than major securities markets in the United States. In addition, Chilean securities markets may be materially affected by developments in other emerging markets, particularly other countries in Latin America. Accordingly, although you are entitled to withdraw the common shares underlying the ADSs from the Depositary at any time, your ability to sell the common shares underlying ADSs in the amount and at the price and time of your choice may be substantially limited. This limited trading market may also increase the price volatility of the ADSs or the common shares underlying the ADSs.

Holders of ADRs may be adversely affected by currency devaluations and foreign exchange fluctuations.

If the Chilean peso exchange rate falls relative to the U.S. dollar, the value of the ADSs and any distributions made thereon from the Depositary could be adversely affected. Cash distributions made in respect of the ADSs are received by the Depositary (represented by the custodian bank in Chile) in pesos, converted by the custodian bank into U.S. dollars at the then-prevailing exchange rate and distributed by the Depositary to the holders of the ADRs evidencing those ADSs. In addition, the Depositary will incur foreign currency conversion costs (to be borne by the holders of the ADRs) in connection with the foreign currency conversion and subsequent distribution of dividends or other payments with respect to the ADSs.

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Certain shareholders have the right to appoint the initial directors to our board and their interests may not coincide with yours.

After the Effective Date, we expect our board of directors to include nine members. Although a final determination as to who will serve on our board of directors upon emergence has not been made, we expect that new directors will be appointed according to the initial director appointment rights of certain Backstop Creditors and Backstop Shareholders. Pursuant to the terms of the Shareholders’ Agreement, an ad hoc group of our general unsecured creditors will be entitled to nominate five directors to our board, including the vice-chairman. Subject to applicable corporate laws and regulations, certain existing large shareholders of LATAM Airlines Group S.A. will be entitled to nominate four directors: one director shall be nominated by Delta Air Lines, Inc., one director shall be nominated by Qatar Airways Investment (UK) Ltd., and the remaining 2 directors shall be nominated by Costa Verde Aeronáutica S.A. and Inversiones Costa Verde Ltda. y Cia. en Comandita por Acciones. See “Management—Directors and Senior Management.” As a result of these appointment rights, the Backstop Creditors and Backstop Shareholders will be able to influence the composition of our board of directors and our management, business plans and policies, including the appointment and removal of our officers. The interests of the Backstop Creditors and Backstop Shareholders may not coincide with your interests, and their director designees may make decisions you disagree with.

Our ADS holders may not be able to exercise preemptive rights in certain circumstances.

While the Registration Rights Agreement and Deposit Agreement provide generally for participation by ADS holders in preemptive rights offerings, we are not required to provide for such participation in connection with offerings constituting less than 2% of the common shares outstanding at such time, excluding any common shares subject to lockup arrangements. To the extent that a holder of our ADSs is unable to exercise its preemptive rights because a registration statement has not been filed or due to restrictions set forth in the Deposit Agreement or applicable law, the Depositary may attempt to sell the holder’s preemptive rights and distribute the net proceeds of the sale, net of the Depositary’s fees and expenses, to the holder, provided that a secondary market for those rights exists and a premium can be recognized over the cost of the sale. A secondary market for the sale of preemptive rights can be expected to develop if the subscription price of the shares of our common stock upon exercise of the rights is below the prevailing market price of the shares of our common stock. However, we cannot assure you that a secondary market in preemptive rights will develop in connection with any future issuance of shares of our common stock or that if a market develops, a premium can be recognized on their sale. Amounts received in exchange for the sale or assignment of preemptive rights relating to shares of our common stock will be taxable in Chile and in the United States. See “Taxation—Chilean Tax—Taxation on Capital Gains.” As described further in “Description of Share Capital,” the inability of holders of ADSs to exercise preemptive rights in respect of common shares underlying their ADSs could result in a change in their percentage ownership of common shares following a preemptive rights offering. If a secondary market for the sale of preemptive rights does not develop and such rights cannot be sold, they will expire and a holder of our ADSs will not realize any value from the grant of the preemptive rights. In either case, the equity interest of a holder of our ADSs in us will be diluted proportionately.

Holders of ADSs have fewer rights than our shareholders and must act through the depositary to exercise those rights.

Holders of our ADSs do not have the same rights as our shareholders and may only exercise the voting rights with respect to the underlying common shares in accordance with the provisions of the Deposit Agreement. A holder of ADSs will not be able to meet this requirement, and accordingly is not entitled to vote at shareholders’ meetings, because the shares underlying the ADSs will be registered in the name of the Depositary. While a holder of ADSs is entitled to instruct the Depositary as to how to vote the shares represented by ADSs in accordance with the procedures provided for in the Deposit Agreement, a holder of ADSs will not be able to vote its shares directly at a shareholders’ meeting or to appoint a proxy to do so. In certain instances, a discretionary proxy may vote our shares underlying the ADSs if a holder of ADSs does not instruct the Depositary with respect to voting. If you wish to directly vote the common shares represented by your ADSs, you will be required to deliver your ADSs to the Depositary for cancellation and withdraw the underlying common shares. Under Chilean law, a shareholder is required to be registered in our shareholders’ registry at least five business days before a shareholders’ meeting in order to vote at such meeting. In addition, in your capacity as an ADS holder, you will not be able to call a shareholders’ meeting unless you withdraw your common shares from the ADS program. We expect that the Depositary will charge you a fee for both withdrawing and depositing common shares. See “Description of American Depositary Shares” for additional information.

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ADS holders may not be able to exercise withdrawal rights that are granted by the Chilean Corporations Act to registered shareholders of publicly traded Chilean corporations.

Under the Chilean Corporations Act, if any of the following resolutions is adopted by our shareholders at any extraordinary shareholders meeting, dissenting shareholders have the right to withdraw from LATAM Airlines Group and to require us to repurchase their shares, subject to the fulfillment of certain terms and conditions. A dissenting shareholder is a shareholder who either attends the shareholders meeting and votes against a resolution which results in a withdrawal right or, if absent from the shareholders meeting, a shareholder who notifies the company in writing within 30 days of the shareholders meeting of such shareholder’s opposition to the resolution and that such shareholder is exercising his or her right to withdraw from the company. For a description of the resolutions and situations that results in a shareholder’s right to withdraw, see “Description of Share Capital— Right of Dissenting Shareholders to Tender Their Shares.”

In addition, shareholders of publicly held corporations have the right to withdraw if a person acquires two-thirds or more of the outstanding shares of such corporation with the right to vote (except as a result of other shareholders not having subscribed and paid a capital increase) and does not make a tender offer for the remaining shares within 30 days after acquisition.

ADS holders own a beneficial interest in shares held by the Depositary and, accordingly, they are not listed as shareholders on the share registry of the Company. The Depositary will not exercise withdrawal rights on behalf of ADS holders. Accordingly, in order to ensure a valid exercise of withdrawal rights, an ADS holder must withdraw the holder’s common shares from the ADS program and become a registered shareholder of the Company no later than the date which is five Chilean business days before the shareholders’ meeting at which the vote which would give rise to withdrawal rights is taken, or the applicable record date for withdrawal rights that arise other than as a result of a shareholder vote. Withdrawal rights must then be exercised in the manner prescribed in the notice to shareholders that is required to be sent to shareholders of Chilean public companies advising such holders of their right of withdrawal. If an event occurs that gives rise to withdrawal rights, ADS holders will have a limited time to withdraw their common shares from the ADS program and to become registered shareholders of the Company prior to the record date for the shareholders meeting or other event giving rise to such withdrawal rights. If an ADS holder does not become a registered shareholder of the Company prior to such record date he will not be able to exercise the withdrawal rights available to registered shareholders.

As a foreign private issuer, we are not required to disclose as much information to investors as a U.S. issuer is required to disclose and, as a result, you may receive less information about us than you would receive from a comparable U.S. company.

We are subject to the reporting requirements of the Exchange Act. However, as a “foreign private issuer” within the meaning of the Exchange Act, the corporate disclosure requirements that apply to us may not be equivalent to the disclosure requirements that apply to a U.S. company and, as a result, you may receive less information about us than you would receive from a comparable U.S. company. The disclosure requirements applicable to foreign issuers under the Exchange Act are more limited than the disclosure requirements applicable to U.S. issuers. In addition, because we are a foreign private issuer, our directors, officers and 10% shareholders are not subject to the reporting requirements and short-swing profit recapture provisions under Section 16 of the Exchange Act. Publicly available information about issuers of securities listed on the Chilean Stock Exchanges also provides less detail in certain respects than the information regularly published by listed companies in the United States or in certain other countries. Furthermore, there is a lower level of regulation of the Chilean securities market and of the activities of investors in such markets as compared with the level of regulation of the securities markets in the United States and in certain other developed countries.

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Our status as a foreign private issuer exempts us from certain of the corporate governance standards of the New York Stock Exchange.

As a “foreign private issuer” we are exempt from certain NYSE corporate governance requirements. In addition, a foreign private issuer may elect to comply with the practice of its home country and not to comply with certain NYSE corporate governance requirements, including the requirements that (i) a majority of our board of directors (Directorio), consist of independent directors, (ii) a nominating and corporate governance committee be established that is composed entirely of independent directors and has a written charter addressing the committee’s purpose and responsibilities, (iii) a compensation committee be established that is composed entirely of independent directors and has a written charter addressing the committee’s purpose and responsibilities, and (iv) an annual performance evaluation of the nominating and corporate governance and compensation committees be undertaken. A foreign private issuer may also rely on certain exemptions from the independence requirements for members of its audit committee under the Exchange Act Rule 10A-3(b)(1). We currently use these exemptions and intend to continue using these exemptions. Accordingly, you will not have the same protections afforded to investors in companies that are subject to all NYSE corporate governance requirements.

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Use of Proceeds

The common shares or ADSs representing such shares offered hereby are being offered for the account of the Selling Shareholders identified in this prospectus. See “Selling Shareholders.” All net proceeds from the sale of the common shares or ADSs representing such shares will go to the Selling Shareholders. We will not receive any part of the proceeds from such sale of common shares or ADSs representing such shares.

Dividend Policy

In accordance with Chilean corporate law, we must pay annual cash dividends equal to at least 30.0% of our annual consolidated net income for the prior year, calculated in accordance with IFRS, unless otherwise decided by a unanimous vote of the holders of all issued shares, and unless and except to the extent we have accumulated losses. If there is no net income in a given year, we may but are not legally obligated to distribute dividends out of retained earnings; however, in such case, the retained earnings must first absorb losses, if any, subject to limited exceptions. See “Description of Share Capital—Dividend and Liquidation Rights”.

LATAM Airlines Group’s board of directors has the authority to declare interim dividends. Year-end dividends, if any, are declared by our shareholders at our annual meeting.

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The Reorganization

This section provides a description of the Debtors’ restructuring and emergence from bankruptcy assuming that the Effective Date has occurred. The description in this section is qualified in its entirety by reference to the Plan. The terms of the Plan are more detailed than the description provided in this section, which may have omitted descriptions of items that may be of interest to particular investors. Therefore, please carefully consider the actual provisions of the Plan for more complete information about the transactions to be consummated in connection with the Debtors’ emergence from bankruptcy. For further detail regarding the Chapter 11 proceedings, please see the Notes to the Consolidated Financial Statements included in the 2021 Annual Report incorporated by reference in this prospectus. Capitalized terms used but not defined herein shall have the meaning given to them in the Plan.

As a result of the COVID-19 pandemic and its profound impact on worldwide travel and our operations, on the Initial Petition Date, the Debtors filed their petitions for relief under Chapter 11 of the Bankruptcy Code with the Bankruptcy Court. On the Subsequent Petition Dates, the Subsequent Debtors filed their petitions for relief under Chapter 11 of the Bankruptcy Code with the Bankruptcy Court. We refer to these proceedings in this prospectus as our “Chapter 11 Proceedings.” LATAM also filed parallel and ancillary proceedings, which are intended to extend the relief provided for by the Bankruptcy Code to various local jurisdictions and help effectuate a global restructuring.

On November 26, 2021, the Debtors filed the Plan of Reorganization resulting from the negotiation of the RSA, also dated as of November 26, 2021, with an ad hoc group of general unsecured creditors of LATAM Airlines Group S.A. and certain of the Debtors’ large equity holders. The Debtors filed the solicitation version of the Plan of Reorganization on March 25, 2022. On June 18, 2022, the Bankruptcy Court entered the Confirmation Order, which approved and confirmed the Plan of Reorganization. Certain parties in interest have appealed the memorandum decision and order approving entry into the Backstop Agreements, as well as the Confirmation Order.

The transactions contemplated by the Plan are resulting in the infusion of up to approximately US$                 billion through the offerings of new equity, convertible notes, and debt, which we believe are enabling us to exit the Chapter 11 proceedings with appropriate capitalization to effectuate our business plan. Upon emergence, the Company is expected to have total debt of approximately US$                 billion and liquidity of approximately
US$                 billion.

The Equity Rights Offering

Pursuant to the terms of the Plan and the Backstop Agreements, the Company offered up to                 shares of common stock for an aggregate purchase price of $                                 which offering was open to all shareholders in accordance with their preemptive rights under applicable Chilean law and fully backstopped collectively by the Backstop Creditors and Backstop Shareholders pursuant to the terms of the Backstop Agreements.

The New Convertible Notes Offerings

Pursuant to the terms of the Plan and the Backstop Agreements, LATAM issued three classes of convertible notes for a total amount of US$                , each of which was preemptively offered to shareholders in accordance with their preemptive rights under applicable Chilean law. The Convertible Notes are illustratively referred to herein as the New Convertible Notes Class A, the New Convertible Notes Class B and the New Convertible Notes Class C. The New Convertible Notes will be Chilean-law governed instruments. The New Convertible Notes are convertible into common shares of the Company that, together with the shares of new common stock issued pursuant to the Plan by the Company, substantially dilute existing shareholders.

For purposes of registration at the securities registry of the CMF and as provided in the indenture pursuant to which the New Convertible Notes were issued, the New Convertible Notes Class A have been denoted as “Series G,” the New Convertible Notes Class B have been denoted “Series H” and the New Convertible Notes Class C have been denoted “Series I.”

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New Convertible Notes Class A and New Convertible Notes Class C

According to the terms of the Plan, general unsecured creditors were able to opt between participating in the New Convertible Notes Class A or the New Convertible Notes Class C depending on whether or not they elected to contribute new funds in exchange for the New Convertible Notes received.

The New Convertible Notes Class A were offered in a private placement to certain of the Company’s general unsecured creditors and represented the primary means of recovery for general unsecured creditors under the Chapter 11 proceedings. The purchase price for the New Convertible Notes Class A was payable exclusively in claims; no cash consideration was paid by general unsecured creditors in connection with receipt of New Convertible US Notes Class A. The New Convertible Notes Class A have a face value of $1.00 per New Convertible Note and were issued in an aggregate amount of US$                . The New Convertible Notes Class A are convertible to shares of LATAM at a ratio of                  shares per New Convertible Note Class A.

The New Convertible Notes Class C have a face value of $1.00 per New Convertible Note and were issued in an aggregate amount of
US$                . Fifty percent of the New Convertible Notes Class C were directly allocated to the Backstop Creditors pursuant to the terms of the Creditor Backstop Agreement and the remainder were distributed ratably to general unsecured creditors (including the Backstop Creditors) that subscribed and purchased the New Convertible Notes Class C in a private placement backstopped by the Backstop Creditors. This distribution of New Convertible Notes Class C to the subscribing general unsecured creditors was in exchange for a combination of: (i) US$                 of cash consideration and (ii) a settlement (dación en pago), discharge and release of their general unsecured claims in an amount of $                 , in each case, per $1.00 principal amount of New Convertible Note issued and are subject to certain limitations and holdbacks by the Backstop Creditors. The New Convertible Notes Class C are convertible to shares of LATAM at a ratio of                         shares per New Convertible Note Class C.

In addition, general unsecured creditors electing to receive New Convertible Notes Class A or New Convertible Notes Class C are entitled to receive a one-time cash distribution equal to US$                 in the aggregate. This one-time cash payment was distributed between the general unsecured creditors receiving New Convertible Notes Class A and New Convertible Notes Class C. Pursuant to the terms of the Plan, subscribers to the New Convertible Notes Class A were entitled to receive a cash payment equal to no less than 4.875% of the value of their claims, and those that were participating both in the New Convertible Notes Class A and the New Convertible Notes Class C were entitled to receive half of that payment for the proportion of their claims that participate in the New Convertible Notes Class A.

New Convertible Notes Class B

The New Convertible Notes Class B have a face value of $1.00 per New Convertible Note and were issued in an aggregate amount of
US$                . The New Convertible Notes Class B were subscribed and purchased for cash in a private placement by the Backstop Shareholders pursuant to the terms of the Shareholder Backstop Agreement. The New Convertible Notes Class B are convertible to shares of LATAM at a ratio of                  shares per New Convertible Note Class B.

New Local Notes Issuance

In addition, pursuant to the terms of the RSA, the Company will issue new Chilean notes (the “New Local Notes”) denominated in Unidades de Fomento, in an amount equivalent up to US$130.2 million, in settlement of claims of general unsecured creditors that elect to receive such notes in lieu of the New Convertible Notes Class A or the New Convertible Notes Class C, which settlement includes the one-time cash distribution described above. See “—New Convertible Notes Class A and New Convertible Notes Class C.”

The Exit Financing

In addition to the new equity issuance and the New Convertible Notes and New Local Notes offerings referenced above, the Plan of Reorganization also contemplates the incurrence of new debt for approximately US$2.25 billion in notes and term loans and a new revolving credit facility for approximately US$500 million.

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The Exit Financing facilities were structured as debtor-in possession facilities that closed during the pendency of the Chapter 11 proceedings, remaining in place after the emergence of the Debtors from the Chapter 11 proceedings.

The Exit Financing contemplates the incurrence of (i) a Term Loan B facility with an aggregate principal amount of US$     , (ii) a bridge facility in an aggregate principal amount of US$                                which is expected to be repaid with the proceeds of the Company’s offering of 5-year senior secured notes; (iii) a bridge facility in an aggregate principal amount of US$                                which is expected to be repaid with the proceeds of the Company’s offering of 7-year senior secured notes and (iv) a revolving facility in an aggregate principal amount of US$                                (each, an “Exit Facility”). The principal amounts of each Exit Facility (other than the revolving facility) may, in certain circumstances, be increased so long as any such increase is offset by a corresponding decrease in the other Exit Facilities.

In addition to the facilities described above, the Debtors entered into the Junior DIP Commitment Letter with the Junior DIP Financing Lenders on June 10, 2022 which is expected to be funded concurrently with the Exit Facilities. The Junior DIP Commitment Letter contemplates up to US$                 in Junior DIP Financing, comprised of US$                                 funded in cash and up to US$                                 funded on a cashless basis through the deemed extension of outstanding loans during the pendency of the Chapter 11 proceedings. Unlike the Exit Facilities described above, the terms of the Junior DIP provide for its repayment in full prior to the emergence from the Chapter 11 proceedings.

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Unaudited Pro Forma Condensed Consolidated Financial Statements

The following unaudited pro forma condensed consolidated financial statements of LATAM Airlines Group S.A. and subsidiaries along with the accompanying explanatory notes (or the “Pro Forma Financial Statements”) have been prepared to illustrate the effects of the Plan, including the financing transactions contemplated thereunder. The Pro Forma Financial Statements assume the Plan’s Effective Date occurred on June 30, 2022 for the unaudited pro forma condensed consolidated statement of financial position as of June 30, 2022 and on January 1, 2021 for the unaudited pro forma condensed consolidated statements of income for the three-month period ending on June 30, 2022 and June 30, 2021 and for the year ending on December 31, 2021.

The Pro Forma Financial Statements presented herein are provided for informational and illustrative purposes only and are not necessarily indicative of the financial results that would have been achieved had the events and transactions occurred on the dates assumed, nor is such financial data necessarily indicative of the results of operations in future periods. The pro forma adjustments are based on currently available information and certain assumptions that the Company believes are reasonable. The Pro Forma Financial Statements should be read in conjunction with the notes hereto, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and notes included in the 2021 Annual Report and the interim consolidated financial statements included in our Report on Form 6-K dated August 11, 2022, incorporated by reference herein. The unaudited pro forma Condensed Consolidated Financial Statements have been prepared in accordance with Article 11 of Regulation S-X.

TRANSACTION ACCOUNTING ADJUSTMENTS

The Transaction Accounting Adjustments column of the Pro Forma Financial Statements gives effect to the consummation of the Plan, including the following transactions:

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LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED

STATEMENT OF FINANCIAL POSITION

As of June 30, 2022

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LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED

STATEMENT OF FINANCIAL POSITION

As of June 30, 2022

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LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME

For the period ended June 30, 2021

(In thousands of US$, except share and per share data)

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LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME

For the year ended at December 31, 2021

(In thousands of US$, except share and per share data)

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LATAM AIRLINES GROUP S.A. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME

For the period ended June 30, 2022

(In thousands of US$, except share and per share data)

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Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

NOTE 1 – BASIS OF PRESENTATION

The accompanying unaudited Pro Forma Financial statements present the Pro Forma Financial Information of Latam Airlines Group S.A. and subsidiaries assuming that the Plan’s Effective Date occurred on June 30, 2022 for the unaudited condensed consolidated statement of financial position and on January 1, 2021 for the unaudited condensed statement of income for the six-month periods ending on June 30, 2022; June 30, 2021; and for the year ended December 31, 2021.

The following are descriptions of the columns included in the accompanying Pro Forma Financial Statements:

NOTE 2 – PRO FORMA ADJUSTMENTS

Assets:

(a) Cash and cash equivalents

Pro forma changes in cash and cash equivalents include the following sources and uses of cash:

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(b) Property, plant and equipment

In accordance with IFRS 16, any changes in the cash flow that will be paid during the lease term are recognized as a lease modification which affects both the lease liability and the Right of Use asset. The following table shows the effect on the Right of Use asset due to the modification of the lease liabilities resulting from the implementation of the Plan:

Liabilities:

(c) Other financial liabilities

Pro forma changes in other financial liabilities include:

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All of these amounts are accounted for using the effective rate method:

(d) Trade and other accounts payables

Pro forma changes in trade and other accounts payables include the payment of claims (fleet claims, vendor claims and other claims) that will be reduced by payments in cash and New Convertible Notes in accordance with the Plan.

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(e) Accounts payable to related entities

Pro forma changes include the payment of the portion of debt with related entities regarding historical DIP financing Tranche C.

Equity:

(f) Share Capital

Corresponds to the capital increase of US$10,293 million presented in the Plan, assuming:

According to the following detail:

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Description of capital increase:

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(g) Retained earnings / (losses)

The effects on accumulated results of the Plan are as follows:

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(y) US$250 million plus, (z) 75% of excess over US$250 million of the difference between the actual EBITDAR of LATAM over the EBITDAR under the business plan of the Company, if applicable. The company has estimated that the payment of US$212 million is highly probable and has been recognized on the pro forma statement of financial position.

(h) Other Reserves

The negative variation in Other reserves originates from:

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The adjustment reflects the change of the right of use depreciation according to all the assets that were modified with the haircut adjustment and lease modification (mentioned in letter (b)). The depreciation is presented in the statement of income as “cost of sales”.

The adjustment reflects change of interest expense as a result of the Plan implementation. The Plan provides for obtaining new financing instruments and the repayment the Historical DIP Credit Agreement, Bank Loans and others as described previously.

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The average interest rates used to perform the calculations were the following:

Assuming a variation in interest rates on the Exit financing, the Notes and lease liabilities of 1/8 % pro forma interest would increase and decrease in a full year according to the following amounts:

The adjustment reflects the difference of foreign exchange expense as a result of the implementation of the Plan. The following table shows the adjustments for the Historical Local Notes and the expenses of the New Local Notes:

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On November 26th, 2021 the Company filed a Plan of Reorganization and Disclosure Statement in which, among other items, financial forecasts were included together with the proposed issuance of new shares and New Convertible Notes. With the referred information, the Company’s management updated its analysis on the recoverability of deferred tax assets and determined that during the time covered by the financial forecast it will not be probable that part of such deferred tax assets may offset future taxable profits. The Company thereby derecognized deferred tax assets not considered recoverable in the amount of US$1,251,912 during the fourth quarter of 2021. Therefore, no deferred tax assets were recorded in the pro forma financial statements as of June 30, 2022.

The adjustment represents the estimated remaining costs of professional fees that are directly attributable to the implementation of the Plan.

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Management

Directors and Senior Management

The LATAM Airlines Group board of directors consists of nine directors who are elected every two years for two-year terms at annual regular shareholders’ meetings or, if necessary, at an extraordinary shareholders’ meeting, and may be re-elected. Certain matters relating to our corporate governance have not been finalized and may change prior to the Effective Date.