LATAM Airlines to relist on NYSE with potential valuation of $8.5 billion

LATAM Airlines is set to relist its shares on the New York Stock Exchange in a move that could fetch it a valuation of $8.5 billion, the company said on Thursday as reported by Reuters.

Certain shareholders of the company launched a public offering to sell 19 million American Depositary Shares (ADSs), each representing 2,000 common shares of LATAM, the company said. 

The Santiago, Chile-based carrier could raise over $533 million for its selling shareholders if it were to sell shares at a price near its last close on the Chilean stock exchanges, where they are already listed, Reuters said.

An ADS is the U.S. dollar-denominated equity share of a foreign-based company available for purchase on an American stock exchange. The entire issuance is called an American Depositary Receipt (ADR), and the individual shares are referred to as ADS.

By listing on the NYSE, Latin America’s largest airline hopes to achieve higher valuation and access deeper capital pools. 

It expects to list on the NYSE on or about July 25, under the ticker symbol “LTM”. 

The Santiago-based carrier started the process of re-listing ADRs on the NYSE in April and said back then that the process could take up to six months.

Airline delisted from NYSE in 2020 after filing for bankruptcy 

LATAM had delisted its ADR program from the NYSE after filing for relief under Chapter 11 of the US Bankruptcy Code on may 26, 2020. 

Post the delisting, its ADRs continued to trade only on the OTC market under the ticker “LTMAY” at a 1-to-1 ratio between an ADR and ordinary shares. 

In the wake of the pandemic, several foreign airlines had relied on Chapter 11 to restructure themselves. After a year-long restructuring, LATAM had emerged from bankruptcy in 2022 with more than $2.2 billion of liquidity, with its gross debt reduced by $3.6 billion. 

Soon after, it said it was the company’s intention to relist on the exchange in the future and was evaluating the right timing to do so but it would not occur before six months from emergence. 

Listing comes in a sluggish IPO market

While the airline would hope to have an access to a larger pool of investors with the listing and shore up its capital, market watchers are concerned about the timing as the IPO market has remained sluggish with shares of some newly listed firms not performing well. 

“The IPO market has been sluggish, with many new listings struggling to gain traction. LATAM’s NYSE debut, aiming to raise significant funds, signals a cautious optimism. Investors will be keen to see if this move can revive interest in a market still reeling from the pandemic’s impact,” Finimize said. 

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