Apollo Will Take Stake in Aeromexico's New Exit Plan

(Bloomberg) -- Airline Grupo Aeromexico SAB received a proposal to emerge from bankruptcy by having lead lender Apollo Global Management Inc. convert some debt into equity. A previous exit package didn’t include the U.S. firm getting a stake.

The carrier, which filed for Chapter 11 in 2020 after the pandemic decreased travel, said that a group of new and existing creditors and investors will repay the rest of the loan held by Apollo, which led the carrier’s debtor-in-possession financing. Amounts were not disclosed.

Apollo orchestrated a $1 billion rescue plan of the struggling airline last year. The second tranche of the loan, worth $800 million, gave the creditors the option to receive shares in the restructured company. Aeromexico’s largest shareholder, Delta Air Lines Inc., supports the plan and has already said it will acquire $185 million of that tranche. 

Foreign ownership requirements will be complied through a group of long-term Mexican investors, Aeromexico said. The company’s board has approved the plan, and a revised version will be filed before a federal bankruptcy court in New York. The hearing to confirm the plan will be set by the court at a later date.

The new plan will replace one filed on Oct. 1 that included $1.2 billion in equity and as much as $537.5 million in new debt. However, that deal didn’t include Apollo converting any debt into equity. That plan estimated Aeromexico to be worth $5.4 billion.

Apollo declined to comment.

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