SCHEDULE: Strategic Value Partners Exits LATAM Airlines Stake

Strategic Value Partners and its affiliates have sold their entire beneficial ownership in LATAM Airlines Group S.A., ceasing to be a 5% shareholder.

Summary

• Strategic Value Partners, LLC and its affiliated funds (the "Funds") sold a significant portion of their holdings in LATAM Airlines Group S.A. on September 24, 2025.
• The Funds sold 15,503,784 American Depositary Shares (ADSs), each representing 2,000 shares of Common Stock, to J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC (the "Underwriters") at a price of $43.4126 per ADS.
• Additionally, the Funds sold 8,002 shares of Common Stock in the open market at a price of $43.4126 per share.
• As a result of these transactions, the Reporting Persons ceased to be beneficial owners of more than five percent of LATAM Airlines Group S.A.'s Common Stock.
• The Underwritten Offering is scheduled to close on September 26, 2025.
• The Funds entered into a lock-up agreement, restricting them from selling or disposing of any remaining Lock-Up Securities for 30 days following the date of the final prospectus related to the Underwriting Agreement, starting September 24, 2025.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive for the selling entity, as it represents a successful exit and realization of value. For the issuer, it's neutral as it's a secondary offering, not a primary capital raise, but the exit of a major investor could be viewed with slight caution by some.

Positives

• The sale represents a successful realization of value for Strategic Value Partners and its affiliated funds, indicating a profitable exit from their investment.
• The underwritten offering structure suggests an orderly market transaction for a large block of shares, potentially minimizing immediate downward price pressure compared to an uncontrolled open market sale.

Negatives

• The complete exit of a significant institutional investor like Strategic Value Partners could be perceived as a loss of a major shareholder and potentially a signal of reduced confidence in the company's long-term prospects by that specific investor.
• The substantial volume of shares sold could create short-term supply pressure on the stock, even with an underwritten offering.

Risks

• The lock-up agreement prevents the Funds from further sales for 30 days, but after this period, any remaining holdings (though stated as 0% beneficial ownership, implying a full exit) could theoretically be sold, although this filing indicates a complete divestment.
• The market's reaction to a major institutional investor exiting its position could lead to increased volatility in LATAM Airlines Group S.A.'s stock price.

Future Outlook

The Funds are subject to a 30-day lock-up period, preventing further sales of Lock-Up Securities, which commenced on September 24, 2025. This indicates a temporary stabilization of the selling pressure from this specific group of investors.

Industry Context

The airline industry, particularly in Latin America, has faced significant challenges and restructuring in recent years. A major institutional investor exiting its position in LATAM Airlines Group S.A. could reflect a strategic decision based on the investor's portfolio rebalancing or a specific view on the company's valuation or future prospects within this dynamic industry. It could also simply be a realization of gains after a period of recovery.

Comparison to Industry Standards

• This filing primarily details a divestment by a significant shareholder, not operational results, so direct comparisons to industry operational benchmarks (e.g., revenue per available seat mile, load factor) are not applicable.
• Large block sales by institutional investors are common in the market, often executed through underwritten offerings to manage market impact. The price of $43.4126 per ADS reflects a market-determined valuation at the time of the transaction, comparable to other secondary offerings in the airline sector or broader market where large stakes are divested.

Stakeholder Impact

• **Shareholders**: The sale by a major institutional investor could lead to short-term price volatility. New investors acquiring shares in the offering will become part of the shareholder base.
• **Company Management**: The company will need to engage with a potentially altered shareholder base, though the core operations are unaffected by this secondary market transaction.
• **Investment Banks (Underwriters)**: J.P. Morgan Securities LLC and Goldman Sachs & Co. LLC benefit from fees associated with underwriting the offering.

Next Steps

• The Underwritten Offering is scheduled to close on September 26, 2025.
• The Funds will be subject to a 30-day lock-up period from September 24, 2025, during which they cannot sell or dispose of Lock-Up Securities.

Key Dates

Recommendation

The filing details a significant divestment by a major institutional investor, Strategic Value Partners, which has ceased to be a 5% beneficial owner. While this represents a realization of value for the seller, it does not inherently provide new positive or negative operational information about LATAM Airlines Group S.A. The market has absorbed this large block sale through an underwritten offering, which typically aims to minimize disruption. Investors should 'hold' to observe how the market digests this change in ownership structure and await further operational or strategic updates from the company before making a definitive 'buy' or 'sell' decision. The exit of a major investor can sometimes signal a lack of further upside from that investor's perspective, but it doesn't necessarily imply a negative outlook for the company itself.

Keywords

LATAM Airlines Group S.A., Strategic Value Partners, ADS, Common Stock, Underwritten Offering, Share Sale, Institutional Investor, Schedule 13D, Divestment, Airline Industry