LATAM Airlines will relist on the New York Stock Exchange, a move which could give it a value of up to $8.5 billion. This was reported on by Reuters on Thursday.
The company announced that certain shareholders launched an offering of 19 million American depositary shares (ADSs), which each represent 2,000 ordinary shares of LATAM.
Reuters reported that the Santiago-based airline could generate over $533m for its shareholders if they sold shares near their last closing price on Chilean stock markets, where these are already listed.
ADS stands for the equity shares of foreign companies denominated in U.S. dollars that are available to be purchased on American stock exchanges. American Depositary Receipts (ADR) are the entire issue, and ADS is each individual share.
Latin America’s biggest airline, Aerolineas Latinas, hopes that by listing on the NYSE it will achieve a higher valuation and have access to deeper capital sources.
The company expects to be listed on NYSE by or around July 25 under the ticker “LTM”.
Santiago-based airline started the process in April of relisting ADRs at the NYSE and stated that it could take six months.
Airline to be delisted in 2020 from NYSE after bankruptcy
LATAM delisted the ADR Program from the NYSE on May 26, 2020 after it filed for Chapter 11 relief of the US Bankruptcy Code.
After the delisting its ADRs continue to trade on the OTC Market under the ticker “LTMAY” at a ratio of 1:1 between ADRs and ordinary shares.
After the Pandemic pandemic several foreign carriers had used Chapter 11 restructuring to get themselves back on track. LATAM emerged in bankruptcy from a restructuring that lasted a full year, and its debt was reduced to $3.6 billion.
It was announced shortly after that the intention was to list the company on the stock exchange again in the future. The timing was being evaluated, but the listing would not take place before six months.
A sluggish IPO marketplace is ripe for listing
Market watchers worry about the timing, as the IPO markets have been sluggish and shares of newly listed companies are not doing well.
The IPO market is a bit sluggish. Many new listings are struggling to get traction. LATAM is aiming for a significant amount of funds with its NYSE debut. This signals a cautious optimistic. Finimize stated that investors will watch closely to see if the move revives interest in a still-struggled market.
As new information becomes available, this post LATAM Airlines relists on NYSE at a potential $8.5 billion valuation may change.
