SCHEDULE: SVP Reduces LATAM Airlines Stake to 5.4% After Open Market Sale

Strategic Value Partners and affiliated entities sold 5 million American Depositary Shares of LATAM Airlines Group S.A. in the open market, reducing their aggregate beneficial ownership to 5.4%.

Summary

• Strategic Value Partners, LLC and its affiliated entities, including Victor Khosla, collectively reported a beneficial ownership of 31,007,576,002 shares of LATAM Airlines Group S.A. common stock, representing 5.4% of the class.
• This filing is an amendment to a Schedule 13D, reflecting changes in ownership.
• On September 11, 2025, the reporting persons sold an aggregate of 5,000,000 American Depositary Shares (ADSs) in the open market.
• These 5,000,000 ADSs represent 10,000,000,000 shares of Common Stock.
• The sale was executed at a price of $47.86 per ADS.
• The ownership percentage is calculated based on 574,219,895,457 shares of Common Stock outstanding.
• This outstanding share count accounts for recent share repurchases by LATAM Airlines Group S.A. of 9,671,006,041 shares on May 1, 2025, and 20,550,887,837 shares on July 31, 2025.
• A lock-up agreement waiver was granted on September 8, 2025, related to a previous Underwritten Offering that closed on August 18, 2025.
• New customary lock-up provisions were agreed upon for the ADSs through September 19, 2025, in connection with the recent sale.

Sentiment

Score: 5

Explanation: The filing is a factual report of a significant shareholder, Strategic Value Partners, reducing its stake in LATAM Airlines Group S.A. through an open market sale. While a reduction in stake by a major investor can sometimes be viewed negatively, the transaction itself is a routine part of portfolio management, especially following a lock-up expiration. The filing does not contain new operational or financial performance data for the company, making the sentiment neutral regarding the company's underlying business.

Positives

• The sale of ADSs at $47.86 per ADS indicates a specific valuation achieved for a significant block of shares.
• LATAM Airlines Group S.A.'s recent share repurchases (9,671,006,041 shares on May 1, 2025, and 20,550,887,837 shares on July 31, 2025) could be seen as a positive for remaining shareholders by reducing the outstanding share count.

Negatives

• A significant shareholder reducing their stake from an unspecified higher percentage to 5.4% could be perceived negatively by the market, potentially signaling a lack of conviction or a move to rebalance portfolios.

Risks

• The reduction in stake by a major investor like Strategic Value Partners could lead to increased selling pressure on LATAM Airlines Group S.A. shares.
• The market might interpret the sale as a signal of potential future underperformance or a lack of further upside by a sophisticated investor.

Future Outlook

The filing does not provide specific forward-looking statements or guidance from LATAM Airlines Group S.A. It primarily details a past transaction by a significant shareholder and a short-term lock-up agreement expiring on September 19, 2025.

Industry Context

This filing primarily concerns a change in beneficial ownership by a specific investment group in LATAM Airlines Group S.A. and does not offer direct insights into broader airline industry trends or competitive dynamics. However, the company's recent share repurchases could indicate management's confidence in its valuation or a strategy to optimize capital structure, which is a common practice across industries, including airlines, when conditions allow.

Stakeholder Impact

• Shareholders: The reduction in stake by a major investor could lead to increased market scrutiny and potential short-term price volatility. The company's share repurchases could be beneficial for remaining shareholders by increasing their proportional ownership.

Next Steps

• The new customary lock-up provisions for the Reporting Persons' ADSs will expire on September 19, 2025.

Key Dates

Recommendation

The filing details a significant shareholder's decision to reduce their stake, which is a transactional event rather than an indicator of the company's operational performance or future prospects. While the sale might introduce some short-term selling pressure, it doesn't inherently change the fundamental investment thesis for LATAM Airlines Group S.A. without further information on the company's financial health or strategic direction. Investors should hold and monitor for further company-specific news or broader industry developments.

Keywords

LATAM Airlines Group S.A., LTM, Strategic Value Partners, SVP, Schedule 13D, beneficial ownership, ADS, common stock, share sale, lock-up agreement, share repurchase, airline industry, equity