Mexico’s Volaris wins support for $160mn capital increase

Volaris (Y4, Toluca) has secured shareholder approval to raise up to MXN3.5 billion pesos (USD160 million) in capital, it outlined in a statement and stock exchange filing on September 22. As previously reported, the low-cost carrier has been evaluating different financing alternatives, and at an extraordinary general meeting on September 18, the company’s board of directors proposed several measures. Shareholders approved a capital increase, which will “strengthen the carrier’s capital position and take advantage of potential growth opportunities,” Volaris said. The company is now considering a rights offering, an outright sale of shares, or the issuance of debt in the form of convertible debentures in Mexico City, New York or other stock exchanges, the final terms and conditions of which will be based on the market conditions at the time of the offering. “The company’s goal is to obtain the most cost-effective financing structure that delivers both strength to our balance sheet and reaffirms our long-term commitment to employees and shareholders,” Volaris explained. The covid-19 crisis is “an opportunity to ramp up more quickly and strengthen its competitive position,” it added. “We hope that the resources will be used to take advantage of opportunities neglected by the market, due to the precarious situation of its competitors, specifically to grow its route network and expand its fleet.” Meanwhile, Volaris continues to reach out to new destinations to try to reactivate the domestic market and local tourism and offer an alternative to bus travel.