Aeromexico Sees Chapter 11 Exit This Year With $1.7 Billion Plan

(Bloomberg) -- Grupo Aeromexico SAB sees emerging from Chapter 11 by the end of this year with an exit plan worth about $1.7 billion.

The airline, which filed for bankruptcy protection in June 2020 as the Covid-19 pandemic brought travel to a halt, filed a motion late Thursday to extend the period to issue a complete plan to Dec. 9. The step was taken “out of an abundance of caution” as it seeks to resolve pending matters.

Aeromexico is “working fervently to resolve outstanding issues,” the airline said a filing to the court, some of which relate to its fleet.

The carrier filed a plan on Oct. 1 that includes $1.2 billion in new equity and up to $537.5 million in new debt. The debt will be used to pay in full the $1 billion debtor-in-possession loan led by Apollo Global Management Inc. except for those creditors who chose to convert their loans into equity. The plan estimates the company is worth $5.4 billion.

Aeromexico says it received three exit financing proposals, which included one from Apollo. During mediation, the other two proposals from groups of creditors were combined into a single proposal that will deliver “the greatest value,” the airline said.

Apollo did not file a notice to convert its Tranche 2 loans into equity by the required date, meaning most of that loan worth $800 million will have to be repaid in full, according to the filing. 

A hearing on the motion will be held on Oct. 21 before Judge Shelley C. Chapman. 

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