Aeromexico files updated reorganization plan
Grupo Aeromexico, the owner company of Mexican flag carrier Aeromexico filed a revised version of its reorganization plan.
The amended document includes the final terms of a financing proposition, following which the company aims to designate its lenders “exceptional recoveries and retain substantial equity in the reorganized company”.
On November 30, 2021, Invictus Global Management, the creditor in the bankruptcy, sent an official letter to Delta Air Lines and Apollo Global Management, the two largest stakeholders of Aeromexico, regarding the company’s ongoing restructuring process. In the letter, the creditor outlined the need for “constructive leaders” and asked both stakeholders to apply their “interests and influence” to ensure “that there is a fair and consensual path forward for all stakeholders – rather than one marred by conflicts of interest and opacity”.
The letter continues: “Delta is Aeromexico’s largest equity holder today at almost 50% and Ed Bastian, its Chief Executive Officer, sits on Aeromexico’s Board of Directors. Apollo provided the $1 billion debtor-in-possession financings (of which the $800 million tranches provide Apollo with significant case-control through its unprecedented equity conversion option). Thanks to the unique exit financing terms you have collectively aligned on, you are both positioned to receive exceptional recoveries and retain substantial equity in the reorganized company.”
Meanwhile, Aeromexico announced that it will continue working with its key stakeholders “to obtain Court approval of the [restructuring] plan, solicit votes in favor of the plan” while aiming to emerge from the Chapter 11 process “as expeditiously as possible”.
The amended restructuring plan is due to be evaluated by the US Bankruptcy Court on December 6, 2021.
Mexico's second-largest airline filed for Chapter 11 bankruptcy protection in the U.S in June 2020 as the global pandemic brought air travel to halt. Then, in October 2021, the company filed a $5.4 billion restructuring plan. It aims to emerge from bankruptcy by the end of 2021.
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