Aeromexico exits Chapter 11 with $1.5 billion in new capital raised

By Sarah Lizee

Olympia, Wash., March 17 – Grupo Aeromexico, SAB de CV announced that its Chapter 11 plan of reorganization has gone into effect, concluding its financial restructuring process and emerging from bankruptcy.

Under the plan, which was confirmed on Feb. 4, the equity value of the reorganized company is $2.56 billion, and the new outstanding listed shares are 136.42 million, excluding treasury shares pending to be subscribed in the amount of 13.64 million. The authorized total amount of shares issued by the company is 150.07 million shares.

The theoretical value of the new shares is 389.0187 pesos per share divided by new subscribed shares, which results in about $18.79 per share converted at the current official exchange rate.

The largest shareholders of the reorganized company include funds managed by Apollo Global Management, Delta Air Lines, as well as existing and new Mexican investors that formed the group with voting control.

The Baupost Group, Silver Point Capital, Oaktree Capital Management and other funds that were part of the informal groups of creditors are also shareholders after investing about $720 million in new capital.

This is in addition to other amounts related to fees accrued on the debtor-in-possession facility and on the new equity contributions payable in new stock as provided in the plan.

Additionally, key stakeholders are funding new exit debt of $762.5 million in the form of new dollar-denominated notes.

As a result of the plan and related transactions, the company gained access to about $1.5 billion in new capital.

Under a resolution of shareholders meeting, a new board of directors has been formed that is comprised of a majority of Mexican nationals and independent members in full compliance with Mexican foreign investment law and regulations, along with the continued participation of existing Mexican controlling investors, the chairman of the board, Javier Arrigunaga, and the chief executive officer, Andres Conesa.

Aeromexico is planning to invest about $5 billion over the next five years in fleet and customer experience improvements.

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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