SCHEDULE: Strategic Value Partners Reduces LATAM Airlines Stake Amid Share Repurchase

Strategic Value Partners and its affiliates have reduced their beneficial ownership in LATAM Airlines Group S.A. to 11.5% following the sale of over 6.7 billion shares to the issuer as part of its approved share repurchase program.

Summary

• Strategic Value Partners, LLC and its affiliated entities (the "Reporting Persons") filed an Amendment No. 5 to Schedule 13D regarding their beneficial ownership in LATAM Airlines Group S.A.
• The Reporting Persons collectively hold 69,507,576,002 shares of Common Stock, representing 11.5% of the class, based on 604,441,789,335 shares outstanding as of June 17, 2025.
• On July 30, 2025, certain Reporting Persons sold a total of 6,799,634,277 shares of Common Stock to LATAM Airlines Group S.A.
• The sale was executed at a price of CLP$20.6 per share, equivalent to approximately $0.021 USD per share.
• This transaction was part of LATAM Airlines Group S.A.'s share repurchase program, which was approved at its Extraordinary Shareholders Meeting on June 26, 2025.
• Prior to the sale, the Reporting Persons converted American Depositary Shares (ADSs) into underlying Common Stock to facilitate the transaction.

Sentiment

Score: 6

Explanation: The filing reports a significant share repurchase by the issuer, which is generally a positive signal for shareholders as it can reduce share count and potentially boost EPS. However, the reduction in stake by a major institutional investor (Strategic Value Partners) could be viewed with mixed sentiment, though it's part of a planned repurchase.

Positives

• LATAM Airlines Group S.A. is actively executing its share repurchase program, indicating a commitment to returning value to shareholders and potentially improving earnings per share.
• The share repurchase program was approved by an Extraordinary Shareholders Meeting, suggesting strong corporate governance and alignment with shareholder interests.

Negatives

• Strategic Value Partners and its affiliates have reduced their stake, which could be interpreted as a lack of conviction in the company's future growth by a significant institutional investor, although it is part of a repurchase program.

Future Outlook

No forward-looking statements or guidance provided in this filing.

Industry Context

This filing primarily concerns a change in beneficial ownership and a share repurchase by LATAM Airlines Group S.A. It does not provide broader industry trends or competitive analysis. Share repurchases are a common capital allocation strategy in mature industries like airlines, often used to return capital to shareholders when organic growth opportunities are limited or to signal undervaluation.

Corporate Governance

Related Party Transactions

• The sale of shares by Strategic Value Partners and its affiliates, who are significant beneficial owners, to LATAM Airlines Group S.A. as part of a share repurchase program, could be considered a related party transaction due to the existing relationship and influence.

Stakeholder Impact

• Shareholders: The share repurchase reduces the total number of outstanding shares, which can increase earnings per share (EPS) and potentially the stock price for remaining shareholders. For the selling shareholders, it represents a liquidity event at a pre-determined price.

Key Dates

Recommendation

The filing indicates a significant share repurchase by LATAM Airlines, which is a positive signal for capital allocation and potential EPS accretion. However, the reduction in stake by a major institutional investor like Strategic Value Partners, even as part of a repurchase, warrants a 'hold' rather than a 'buy' recommendation. Investors should monitor the company's operational performance and future capital allocation strategies to assess long-term value.

Keywords

LATAM Airlines, Strategic Value Partners, Schedule 13D, Share Repurchase, Beneficial Ownership, Common Stock, American Depositary Shares, SEC Filing, Institutional Investor, Equity Stake