Brazil's Azul backs off from LATAM bid, citing valuation concerns

Azul confirmed making an offer this month to combine with Chile's LATAM Airlines Group, which is in bankruptcy proceedings, but the Brazilian airline said it had since decided to focus on its own operations. LATAM shares plunged on Monday by as much as 85% in Santiago trading, before paring losses to around 45%. The Brazilian airline said its non-binding proposal submitted on Nov. 11 had included around $5b in equity financing and was backed by some creditors of LATAM. However, Azul added that LATAM's valuation in the bankruptcy proceedings had become higher than it found acceptable, citing ongoing uncertainty in the aviation industry amid the COVID-19 pandemic, especially in long-haul markets. LATAM filed a reorganization plan on Friday in which it proposed an $8.19b infusion of capital into the group in a bid to exit its Chapter 11 bankruptcy. read more The Chilean company previously said it had received several offers to fund the exit from Chapter 11 bankruptcy, each of which was worth more than $5b. Azul said in its filing that it believed its non-binding proposal would have provided significant increased network growth and generated synergies estimated at more than $4b. It added that "the standalone plan presented by LATAM is, by definition, unable to generate synergies from a combination".<br/>