Latam Airlines Falls in Chile After Confirming Share Sale

Latam Airlines SA, Latin America’s largest carrier, dropped the most since August after its chairman said the company plans to sell new shares as part of an effort to recover the investment grade it lost last year.

Latam retreated 2.6 percent to 9,800 pesos at 1:31 p.m. in Santiago, its biggest drop on a closing basis since Aug. 7. The Ipsa benchmark index fell 0.5 percent.

The airline, formed by Lan Airlines SA’s $3.3 billion takeover of Tam SA, will sell new shares to improve its debt ratios and return to investment grade, Chairman Mauricio Amaro told reporters today in Santiago after its annual general shareholder meeting.

“Investment-grade is something that we will seek to return to, if not in the short term, certainly in the medium term,” Amaro said. “We are evaluating a capital increase at the moment.” Amaro wouldn’t comment on a specific date for the share sale or how much it plans to raise.

Latam’s credit rating was lowered to BB+, or one level below investment grade, by Fitch Ratings in June 2012. Fitch said that an increase in the rating would require a reduction in debt ratios.

To contact the reporter on this story: Eduardo Thomson in Santiago at ethomson1@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.