Aeromexico disclosure statement hearing adjourned to Nov. 17

By Sarah Lizee

Olympia, Wash., Nov. 2 – Grupo Aeromexico, SAB de CV’s hearing on approval of the disclosure statement for its Chapter 11 plan of reorganization was adjourned to Nov. 17 from Nov. 10, according to a press release.

As previously reported, the debtors will fund distributions under the plan with the proceeds of up to $1.19 billion of new stock to be purchased by Delta Air Lines, Inc., an investor group including Baupost Group, LLC, Silver Point Capital, LP, Oaktree Capital Management, LP and Invictus Global Management, LLC (the BSPO investors), and some senior noteholders; debt financing that will include an issuance of up to $537.5 million of new first-lien notes to be purchased by the BSPO investors and some senior noteholders; and cash on hand.

Under the plan, holders of tranche 1 DIP facility claims will receive payment in full in cash from the proceeds of the debt financing.

Holders of tranche 2 DIP facility claims exercising the voluntary equity conversion will receive new stock, the amount of which will be based on plan equity value, subject to dilution.

Holders of tranche 2 DIP facility claims who do not exercise the voluntary equity conversion election will receive payment in full in cash, including an exit fee, with the proceeds of the equity financing.

Holders of DIP reimbursement claims will receive payment in full in cash.

Administrative expense claims and priority tax claims will be paid in full in cash.

Professional fee claims will be paid in full.

Holders of secured claims will receive payment in full in cash or reinstatement.

Holders of other priority claims will receive payment in full in cash.

Holders of Aerovias and Grupo Aeromexico recourse claims will receive either their pro rata share of each of a new stock allocation or the Aerovias/Group claimholder cash pool, which is up to $300 million, provided that if the elections made by holders in this class would result in less than the full amount of the Aerovias/Grupo claimholder cash pool being distributed, the remaining amount will be allocated to junior classes, based on the same allocation of new stock to those classes and correspondingly reduce the amount of new stock to be received by holders in those classes, and the new stock instead will be distributed to holders of Aerovias and Grupo Aeromexico recourse claims that elect to receive new stock. If more than the full amount of the cash pool is distributed, those elections will be reduced pro rata and each holder will receive additional new stock in lieu of the reduced amount received from the cash pool.

Holders of general unsecured claims against Grupo Aeromexico, Aerovias, Aeromexico Connect and Aeromexico Cargo will receive their pro rata share of a new stock allocation.

Holders of unsecured convenience claims against Grupo Aeromexico, Aerovias, Aeromexico Connect and Aeromexico Cargo will receive a pro rata share of cash.

Intercompany claims will be reinstated, extinguished, compromised, addressed, setoff, canceled or settled, potentially without any distribution to holders.

Intercompany interests will be reinstated.

Holders of interests in Grupo Aeromexico’s capital stock that do not exercise their preemptive rights under the equity rights offering will be diluted and any possible recovery will be deemed waived. Holders who do exercise their preemptive rights under the equity rights offering will receive their pro rata share of the new stock representing the subscription and payment of the exercised preemptive rights.

Grupo Aeromexico, a holding company for commercial aviation, is based in Mexico City. The company filed Chapter 11 on June 30, 2020 in the U.S. Bankruptcy Court for the Southern District of New York under case number 20-11563.

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