The National Bank for Economic and Social Development (BNDES) affirmed, in the late afternoon of this Tuesday, 26, that it continues negotiating support to Latam even after the company filed for bankruptcy (Chapter 11) in the United States.
According to the development bank, the conversations take place in the “ways already proposed” by the union of financial institutions, which works on emergency lines of financing for the sectors most affected by the crisis caused by the coronavirus pandemic. “BNDES continues to negotiate support for Latam, based on the models already proposed to the three major airlines “, the agency said in a note.
Throughout the day, uA meeting between representatives of the airline and the banks would have taken place so that more explanations could be given about the movement, as found by Estadão / Broadcast. Bradesco coordinates assistance to the segment alongside BNDES – each private bank has a sector to support the development bank in organizing the plan.
Latam’s request for judicial reorganization in the United States, however, would not have come as a surprise to banks, according to a source. “We knew of the greatest weakness of the Latam group,” admitted one of the executives close to the negotiations, who preferred not to have his name revealed.
According to sources who follow the negotiations and spoke on condition of anonymity, the banks are more reticent after the movement and should change the conditions required, despite the fact that Latam’s Brazilian operation is outside the request for judicial recovery, made only in the United States until now. . The amount allocated to the company should be reduced, as a result of the increased risk perception.
“We continue to talk to Latam, we do not leave the table. There is the question of the presentation of guarantees and net security value. Maybe they have to bring new facts to make it clearer to the market,” says a source.
The “molds already proposed”, as emphasized by the BNDES, include requirements that already hampered Latam’s access to emergency support, such as the need for supported companies to have shares traded on the stock exchange in Brazil, revealed the Estadão / Broadcast two weeks ago.
They also assume that the funds will be raised in public offerings of debt securities (part of them in bonds convertible into shares), which would only be realized with a minimum participation of market investors – BNDES would keep 60% of the offers, banks with 10% and the remaining 30% with investors.
According to a source accompanying the negotiations and asked not to have his name revealed, BNDES is still studying the recovery request and its effects on Latam’s Brazilian operation. The position, at least until now, is that operations depend on the participation of market investors to get off the ground.
“Latam, in addition to presenting considerations to the BNDES, will have the challenge of trying to mitigate its risk vis-à-vis the BNDES / banks and the market”, says the vice president of a major bank. “Their name is very tainted,” he says.
He considers, however, that it is necessary to separate the situation of Latam from Gol and Azul. “These companies have to present their considerations to the BNDES and, depending on their acceptance or propositions, they will have good chances of materializing,” he says.
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