Aeromexico escapes bankruptcy with new controlling shareholders

©Aeromexico

As one of three Latin American carriers which have filed for bankruptcy protection since the outbreak of the COVID-19 pandemic, Aeromexico has received court approval for its restructuring plan.

“I could not be more pleased to tell you the plan of reorganization is confirmed,” U.S. Bankruptcy Judge Shelley Chapman commented after the agreement to pay a settlement to the creditors was announced. As a consequence, Aeromexico will now be able to emerge from potential bankruptcy with new majority shareholders.

Aeromexico filed for bankruptcy protection in June 2020 and has been in negotiations with both secured and unsecured creditors since then. The approved plan will allow for an injection of capital for Aeromexico with Apollo Global Management becoming the major shareholder. Delta Air Lines, which had already invested in Aeromexico, will be increasing its stake to 20%. Apollo Global Management frequently invests in distressed companies. Previously, a group of junior creditors had opposed certain Aeromexico proposals as it was felt that Delta Air Lines and four individual Mexican investors were being given preferential treatment.

In addition, Aeromexico has agreed to pay Invictus Global Management US$1.1 million in cash, and a further US$880,000 to cover the legal fees of a group of junior creditors. The day prior to receiving approval for financial restructuring, Aeromexico had reached an agreement with an official committee which represented unsecured creditors in the bankruptcy proceedings. (£1.00 = US$1.35 at time of publication).

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