The US Bankruptcy Court in New York has confirmed the joint restructuring plan for the exit from Chapter 11 of Grupo Aeroméxico and its subsidiaries, after the company struck a deal with hold-out creditors who had objected to the plan.
This followed after Grupo Aeroméxico had reached a USD40 million settlement on January 27 with the group of unsecured creditors, Reuters and Bloomberg reported. These included Invictus Global Management and Corvid Peak Capital Management, which had considered the plan overly weighted towards the main shareholders, Apollo and Delta Air Lines (DL, Atlanta Hartsfield Jackson). The last-ditch effort came ahead of a hearing on the same day by the New York court.
In what it described as "the most important milestone to date", Grupo Aeroméxico said it would continue to work with all its key stakeholders to swiftly emerge from Chapter 11, at which point corporate resolutions adopted during a January 14 shareholders meeting would become fully effective.
As reported, the restructuring plan will see Grupo Aeromexico write-off USD1.1 billion in liabilities while raising about USD720 million of new equity capital and USD762.5 million of new debt, in addition to the capitalisation of a large portion of its debt, which is to give it enough liquidity to emerge from Chapter 11 bankruptcy protection.
Apollo Global Management will convert its debt into equity to become the largest stakeholder with a 22.38% stake. Delta Airlines, which had controlled a majority of Aeroméxico before the bankruptcy, will have a reduced stake of 20%. A group of Mexican investors will hold 4.1%, while the remaining shares will be distributed among new investors and creditors.
Aeroméxico's creditors voted overwhelmingly in favour of the restructuring plan.
