Qatar Airways to acquire up to 10% of LATAM Airlines

Enrique Cueto, CEO of LATAM Airlines Group (left) with Akbar Al Baker, Group Chief Executive Qatar Airways

FARNBOROUGH, United Kingdom – LATAM Airlines Group S.A., Latin America’s leading airline group, and world-class airline Qatar Airways, both members of the oneworld alliance, announced today that they have entered into a subscription agreement providing for Qatar Airways to acquire up to 10 per cent of LATAM’s total shares, which will be acquired in connection with a capital increase.

As provided for in the subscription agreement, LATAM Airlines Group will hold an Extraordinary Shareholders Meeting no later than 2 September, 2016 to propose a capital increase in the amount of US$613 million through the issuance of new shares at a price of US$10 per share.

The announcement was made at the Farnborough International Air Show in England, by both airlines’ CEOs: Akbar Al Baker, Group Chief Executive of Qatar Airways and Enrique Cueto, CEO of LATAM Airlines Group.

“LATAM represents an exciting opportunity to invest and support the development of our long-term relationship. As a leading airline in Latin America, and key member of oneworld, this investment provides potential opportunities for Qatar Airways’ global network, alongside our successful investment in IAG,” said Akbar Al Baker, Group Chief Executive of Qatar Airways.

“We are proud to announce Qatar Airways as a new shareholder of LATAM, reaffirming our bond as existing members of the oneworld alliance. This investment recognises LATAM’s achievements and supports our project for the future. In addition to strengthening our financial position, it will allow us to explore new opportunities for connectivity with Asia and the Middle East, as well as other potential areas of cooperation,” said Enrique Cueto, CEO of LATAM Airlines Group.

The companies expect the transaction to be completed within the fourth quarter of 2016. Qatar Airways was advised by HSBC Bank plc, Weil, Gotshall & Manges LLP and Carey, whilst LATAM Airlines Group S.A. was advised by JP Morgan, Claro & Cía y Sullivan & Cromwell. 

Qatar Airways to buy 49% of Italy’s Meridiana

​DOHA (Reuters): Qatar Airways is to buy 49% of Meridiana in a move that could bolster the Italian carrier’s ability to compete in the European market.

The agreement was reached at the Farnborough International Airshow and the deal will close in early October, subject to certain conditions, Qatar Airways said in a statement on Thursday.

The airline gave no further detail on the conditions or the price.

Meridiana had asked labour unions to agree to 900 job cuts - nearly half its workforce - as part of a planned partnership with Qatar Airways, a person involved in the talks told Reuters in February.

Last month, the Italian government, unions and Meridiana reached an agreement opening the way for the deal to go ahead.

The agreement included the loss of about 400 jobs and a 20% wage cut compared with those stipulated in national collective contracts for the sector, union officials said.

Meridiana, which offers flights to and from the island of Sardinia and other destinations in Italy and elsewhere, is owned by the Aga Khan, a businessman and spiritual leader of the Ismaili Muslims.

“Today, an intense working period starts thanks to this agreement,” Meridiana Chairman Marco Rigotti said in a statement.

“I’m confident that all the Meridiana staff ... will know how to take advantage of this important opportunity to create a new phase for our company.”

The airline is operating under a government-sponsored restructuring plan to help turn it around.

“Partnering with Meridiana would only make Meridiana prosper, grow and actually increase the working population of Meridiana,” Qatar Airlines Chief Executive Akbar al-Baker said in April. “But for the initial period there will be some pain on the part of employees.”

Qatar Airways holds around a 15% stake in British Airways parent IAG and has been open to making further investments to help to expand its reach.

The Middle East carrier is also considering taking a 25-49% stake in Morocco’s Royal Air Maroc, Baker has said.