SCHEDULE: LATAM Airlines Shareholder Sells $604M in ADSs

Strategic Value Partners and affiliates sold 14.25 million American Depositary Shares of LATAM Airlines Group S.A. for approximately $604 million in an underwritten offering.

Summary

• Strategic Value Partners, LLC and its affiliated funds (the "Funds") sold 14,250,000 American Depositary Shares (ADS) of LATAM Airlines Group S.A.
• The sale was part of an underwritten offering at a price of $42.35 per ADS, totaling approximately $603,937,500.
• The offering was conducted through J.P. Morgan Securities LLC and Barclays Capital Inc. as underwriters.
• The transaction is scheduled to close on August 18, 2025.
• Following the sale, Strategic Value Partners, LLC and Victor Khosla beneficially own 41,007,576,002 shares, representing 6.8% of the common stock.
• The ownership percentage is calculated based on 604,441,789,335 shares of Common Stock outstanding as of August 13, 2025.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While a large shareholder selling can be seen negatively, it's a planned, underwritten offering, suggesting an orderly exit or portfolio rebalancing rather than distress. The lock-up provides some stability post-sale. The price achieved is a factual data point, not inherently positive or negative without context of acquisition cost or market performance.

Positives

• The selling shareholders successfully monetized a significant portion of their investment in LATAM Airlines Group S.A. through a large underwritten offering.
• The sale at $42.35 per ADS indicates a specific valuation achieved for this block of shares.

Negatives

• The sale by a significant shareholder group could be perceived as a reduction in their conviction or a move to reallocate capital, potentially creating downward pressure on the stock.
• The lock-up agreement restricts further sales by the reporting persons for a period, limiting their liquidity for the remaining holdings.

Risks

• Market Overhang: The sale of a large block of shares (14.25 million ADSs) could create a perception of market overhang, potentially impacting the stock price.
• Lock-Up Restrictions: The selling shareholders are subject to a lock-up agreement, preventing them from selling additional shares for approximately 30 days after the final prospectus date, which limits their flexibility to react to market changes.
• Share Price Volatility: The market's reaction to a significant shareholder reducing its stake could lead to increased share price volatility.

Future Outlook

The selling shareholders are subject to a lock-up agreement, restricting further sales of Lock-Up Securities for approximately 30 days following the date of the final prospectus related to the offering. This indicates a temporary stabilization period for the market regarding these specific shareholders' holdings.

Industry Context

This filing reflects a significant equity transaction within the airline industry, specifically involving a major Latin American carrier. Such large secondary offerings can indicate a strategic portfolio adjustment by institutional investors, potentially freeing up capital for other opportunities or reflecting a specific view on the issuer's valuation or future prospects within the competitive airline sector.

Comparison to Industry Standards

• The filing does not provide performance metrics of LATAM Airlines Group S.A. that would allow for a direct comparison to industry standards or global benchmarks.
• The transaction is a secondary offering by a shareholder, not a primary offering by the company, thus it does not directly reflect the company's operational performance against competitors like Delta Air Lines, American Airlines, or European carriers such as Lufthansa or Air France-KLM.
• The sale price of $42.35 per ADS represents a specific valuation for this block of shares at the time of the transaction, but without context on the company's financial performance or market conditions, it cannot be assessed against industry valuation multiples (e.g., EV/EBITDA, P/E) of comparable airlines.

Stakeholder Impact

• Shareholders: The sale of a large block of shares by a significant investor could lead to short-term price volatility. The lock-up agreement provides some stability by preventing immediate further sales from these specific shareholders.
• Company (LATAM Airlines Group S.A.): The transaction does not directly impact the company's balance sheet or operations, as it is a secondary offering. However, it could affect market perception and liquidity of its ADSs.

Next Steps

• Closing of the Underwritten Offering on August 18, 2025.
• Selling shareholders are subject to a lock-up period, restricting further sales for approximately 30 days after the final prospectus date.

Key Dates

Recommendation

This filing details a significant secondary offering by a major shareholder, Strategic Value Partners, rather than a direct operational or financial update from LATAM Airlines Group S.A. While the sale of a large block of shares can create short-term market pressure due to increased supply, the transaction is an underwritten offering, suggesting an orderly process. The lock-up agreement on the remaining shares held by the selling parties provides a temporary floor against further immediate sales from this group. Without specific financial performance updates from the company or a clear indication of the selling shareholder's rationale beyond portfolio rebalancing, a "hold" recommendation is appropriate. Investors should monitor the market's absorption of these shares and await the company's next financial report for a more comprehensive assessment of its fundamentals.

Keywords

LATAM Airlines, ADS, American Depositary Shares, Strategic Value Partners, Underwritten Offering, Share Sale, SEC Filing, Schedule 13D, Airline Industry, Equity Offering, Lock-up Agreement