Grupo Aeroméxico shareholders back $4.2bn capital increase

Grupo Aeroméxico shareholders have approved a USD4.266 billion capital increase subject to a third party public offer for the company’s current shares, according to a filing on the Mexican Stock Exchange.

During an ordinary general assembly and an extraordinary meeting of shareholders held in Mexico on January 14, shareholders agreed to a capital increase of MXN86.875 billion pesos (USD4.266 billion), represented by the issuance of 682 trillion (682,119,110,880,207) shares.

These will be subscribed and paid through a USD3.438 billion capitalisation of certain liabilities of the company and its subsidiaries (including USD2.694 billion in unsecured liabilities and USD744.393 million in DIP financing) and a USD828 million capital injection of new resources by certain investors.

Shareholders agreed that under the Chapter 11 restructuring plan, a third party would make a public offer for the acquisition of the company’s shares. As reported earlier, the third party has been named as Alinfra S.C. Its offer will give existing shareholders the option to withdraw from the capital stock before the capitalisation of debt and new contributions into the capital stock. This would dilute the current 682.1 million shares in circulation to near zero on emergence from Chapter 11 restructuring.

Shareholders also agreed to issue another 68.2 trillion (68,211,979,300,000) shares, which will be kept in the company’s treasury so that “current shareholders can exercise, where appropriate, their right of preference of subscription and payment of new issued shares representing the capital stock of the company”. The shares may also be used to compensate company directors and for contractual obligations in labour matters.

According to Reuters, Aeromexico’s biggest creditor, Apollo Global Management, will swap its debt into equity as part of the reorganisation, becoming the airline’s largest stakeholder.

Delta Air Lines (DL, Atlanta Hartsfield Jackson), which had controlled a majority of Aeroméxico before the bankruptcy, would hold about a fifth of its stock on Chapter 11 exit.

Following shareholders’ approval, the plan now needs the go-ahead from the US Bankruptcy Court in the Southern District of New York, which has scheduled a hearing on January 27, 2022.

As reported, Aeroméxico’s creditors already overwhelmingly voted in favour of the restructuring plan.