Report of Foreign Issuer (6-k)
July 25 2016 - 12:50PM
Edgar (US Regulatory)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 6-K
REPORT
OF FOREIGN PRIVATE ISSUER
PURSUANT
TO RULE 13a-16 OR 15d-16
UNDER
THE SECURITIES EXCHANGE ACT OF 1934
July
25, 2016
Commission
File Number 1-14728
LATAM
Airlines Group S.A.
(Translation
of Registrants Name Into English)
Presidente
Riesco 5711, 20th floor
Las
Condes
Santiago,
Chile
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual reports under cover of
Form 20-F or Form 40-F:
Form 20-F ☒
Form 40-F ☐
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(1): ☐
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Santiago, July 25, 2016
Mr. Carlos Pavez Tolosa
Commissioner
Securities and Exchange Commission
Av. Libertador Bernardo O´Higgins
1449
Present
Ref.: Reports
Material Fact.
Dear Commissioner:
In
accordance with Articles 9 and 10 of the Securities Market Law, and pursuant to General Regulation No. 30, and being duly authorized
thereto, I hereby inform you of a material fact from LATAM Airlines Group S.A. (“LATAM”), Securities register No.
306:
LATAM
informs it has reached agreements with the U.S. Department of Justice (“DOJ”) and with the U.S. Securities and Exchange
Commission (“SEC”), both authorities of the United States of America, in force as of this date, the content of which
is substantially similar to the ones described in the material fact sent to your Commission on May 3, 2016, a copy of which is
attached to this material fact and forms part of the same for all effects. The definitive amounts agreed to be paid are US$12,750,000
to the DOJ and US$6,700,000 plus interest to the SEC.
Yours sincerely,
Juan
Carlos Menció
Vicepresidente
Senior Legal
LATAM
Airlines Group S.A.
Santiago,
May 3, 2016
Mr.
Carlos Pavez Tolosa
Superintendent
of Securities and Insurance
Superintendency
of Securities and Insurance
Av.
Libertador Bernardo O’higgins No. 1449
Hand-delivered
Ref.:
Notice of CONFIDENCIAL MATERIAL FACT
________________________________________
Mr
Superintendent:
In
accordance with the provisions of Article 9 and of the third and fourth paragraphs of Article 10 of Law No. 18,045 and with the
provisions of General Rule No. 30, I, duly authorized by the Board of Directors at its meeting held on this same date, inform
the Superintendency, as a CONFIDENTIAL MATERIAL FACT of LATAM Airlines Group S. A (“LATAM”), Securities Registry No.
306, of the following:
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1.
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With
regard to the investigation in 2011 that the U.S. Securities and Exchange Commission
(“SEC”) and the U.S. Department of Justice, both authorities of the United
States of America, initiated regarding payments totaling US$1,150,000 made in 2006-2007
by LAN Airlines S.A. (“LAN”) to a consultant who advised on the resolution
of labor matters in Argentina, investigation in which LATAM has actively cooperated,
the Board of Directors reports as a confidential material fact that, after numerous exchanges
of opinions between LATAM’s attorneys and representatives of the SEC and DOJ regarding
the facts which are part of such investigation and the legal evaluation of this matter,
the advisers have concluded that the available alternative in order to put an end to
it requires seeking and entering into agreements with such authorities that contemplate
the payments of fines and other stipulations described herein.
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2.
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The
purpose of the investigation was to ascertain whether such payments violated the anticorruption
law of the United States of America (“FCPA”), which: (i) prohibits the payment
of bribes to foreign government officials for the purpose of obtaining a commercial advantage;
and (ii) requires the companies bound by such law to make and keep adequate accounting
records, as well as to maintain an adequate system of internal controls. The FCPA applies
to LATAM because of the ADR program that it has in place in the American Securities market.
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3.
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After
an exhaustive investigation, the DOJ and SEC concluded that there was no violation of
the rules of the FCPA that prohibit the payment of bribes, which is consistent with the
results of LATAM’s internal investigations. However, the DOJ and the SEC have deemed
that LAN incorrectly recorded the aforementioned payments in its accounting and, consequently,
violated the part of the FCPA that requires companies to make and keep accurate accounting
records. The above-cited authorities have also deemed that LAN´s internal controls
existing in the years 2006-2007 were deficient, for which reason LAN has additionally
violated the rules of the FCPA that require maintaining an adequate system of internal
controls.
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4.
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In
these circumstances, LATAM’s attorneys have engaged in multiple and prolonged exchanges
of opinions and conversations with the DOJ and the SEC. Based on the information about
such exchanges and conversations that was provided by LATAM’s attorney’s
the Board of Directors has decided to reach an agreement with both authorities.
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5.
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In
accordance, LATAM attorney’s recommended today that the Board of Directors reach
agreements with both authorities in the following terms:
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a.
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With
regard to the DOJ, the agreement would consider primarily: (i) entering into a contract
called a
Deferred Prosecution Agreement
(“DPA”), which is a public
contract by which the DOJ would publicly file charges alleging a violation of the FCPA’s
accounting provisions; LATAM would not be required to respond to those charges and DOJ
would not pursue those charges for a period of 3 years, and the DOJ would dismiss the
charges after the expiration of such period, assuming that LATAM complied with all terms
of the DPA; this would be in exchange for LATAM admitting a series of negotiated facts
that would be described in the DPA and agreeing to pay the negotiated fine referred to
below and other conditions that would be stated in such agreement; (ii) clauses by which
LATAM would admit that the accounting for the payments made to the consultant in Argentina
was incorrect and that, at the time that such payments were made (2006-2007), it lacked
adequate internal controls; (iii) LATAM’s acceptance of an independent consultant,
for 27 months, whose function would be to monitor, evaluate, and report to the DOJ on
the effectiveness of LATAM’s compliance program, and also LATAM’s acceptance
of continuing, for 9 months after the work of the independent consultant is finished,
to evaluate and report to the DOJ, this time on its own, on the effectiveness of the
aforementioned compliance program; and (iv) paying an estimated fine of approximately
$12,500,000 in accordance with to the agreement reached in the DPA.
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b.
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With
regard to the SEC, the agreement would consider primarily: (i) entering into an agreement
that would contain what is called a
Cease and Desist Order
, which is a SEC administrative
order closing the investigation by which LATAM would accept certain obligations and statements
of fact, which would be described in the document; (ii) reproducing the obligations related
to the monitor referred to in 6(a)(iii) above; and (iii) paying an amount of approximately
US$6,500,000 plus interests.
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6.
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The
documents that contemplate these agreements between LATAM and the DOJ and the SEC are
still being negotiated, and it is relevant for the purposes of determining whether or
not the definitive agreements will be entered into to review and agree on each of the
facts that are described, and of the obligations that are assumed, in each of the documents
that must be signed.
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7.
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In
view of the fact that such negotiations are pending, it is not possible at this time
to state with certainty whether final agreements will be reached. However, the Board
of Directors instructed the lawyers to continue the conversations on the terms described
in this instrument and to keep it duly informed of the progress thereof through the Legal
Department.
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8.
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We
estimate that the information in this confidential material fact will remain in the same
condition approximately for the next 60 days.
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Messrs.
Henri Philippe Reichstul, Georges Antoine de Bourguignon Arndt, Ricardo J. Caballero Gibbons, Ramón Eblen Kadis, Carlos
Alberto Heller Solari, Juan Gerardo Jofré Miranda and Juan José Cueto Plaza being present, the Board of Directors
has given instructions for this information to be communicated confidentially, since it refers to pending negotiations whose disclosure
at this time would be prejudicial to the corporate interest, because, among other reasons, the same American authorities that
are conducting the investigation have stated their objection to the disclosure of the content of the possible agreement as long
as negotiations remain pending.
Finally,
we inform you that the following persons are in knowledge with the resolution adopted by the Board of Directors and which is communicated
hereby: the aforementioned directors of LATAM; the general manager of LATAM Mr. Enrique Miguel Cueto Plaza; the CEO of LAN Airlines
S.A. Mr. Ignacio Cueto Plaza; the Vice President of Finance of LATAM Mr. Andrés Osorio Hermansen; the Senior Director of
Investor Relations Mrs. Gisela Escobar Koch; the Vice President of Corporate Affairs Mr. Gonzalo Undurraga Pellegrini; the Vice
President for Legal Affairs of LATAM Mr. Juan Carlos Menció; the Vice President for Legal Affairs of LATAM Mr. Cristián
Toro Cañas; and outside counsel Messrs. Roger Witten, Claudio Salas, Cristóbal Eyzaguirre Baeza, José Miguel
Huerta Molina, Juan Pablo Celis Morgan, and Tomás Ignacio Kreft Carreño.
Without
anything further, yours truly,
Cristián
Toro Cañas
Vice
President for Legal Affairs
LATAM
Airlines Group S.A.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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Date: July 25, 2016
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LATAM AIRLINES GROUP
S.A.
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By:
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/s/
Enrique Cueto
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Name:
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Enrique Cueto
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Title:
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Latam Airlines Group CEO
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