Aeroméxico takes off with restructuring and capital

With a financial restructuring and the injection of capital from a third party, Aeromexico it seeks to be reborn from the ashes and take flight, like a Phoenix.

Last Thursday, the airline reported that a company unrelated to the company launched a public offer to acquire shares in Aeroméxico at a value of one peso per share.

This means that a third party wants to inject capital into the airline so that it can continue operating and its offer is to buy thousands of Aeroméxico shares at that price.

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The firm explained that this third party could acquire a maximum of 331 million 480 thousand 713 shares, which represent 49% of the airline’s capital stock. This caused the price of Aeroméxico shares to end yesterday at 1.16 pesos, its worst closing since it began trading on the Mexican stock exchange (BMV), on April 14, 2011.

In the last two days, the value of its securities plunged 68.6% and is equivalent to a loss of 1,726 million pesos in market capitalization.

The loss in value of the shares is due to the fact that, when a third party who acquires many of them for a penny enters, those of the rest of the shareholders automatically go down in value, explained Jonathan Félix, an analyst of the Verum sector.

With the entry of capital from a third party, the shareholding of the rest of the shareholders will be diluted.

Therefore, once the airline exits Chapter 11 of the Bankruptcy Law in the United States and concludes the acquisition of shares in this third party, a new group of strategic Mexican shareholders will keep 4.1% of the company (Eduardo Tricio Haro , Valentín Diez Morodo, Antonio Cosío Pando and Jorge Esteve Recolons): Apollo, with 22.4%, and Delta Airlines, 20%.

The rest of Aeroméxico’s capital stock will be distributed among new investors and creditors who capitalize their recognized credits in shares representing the airline’s future capital stock.


The future of Aeroméxico

Once the court confirms the restructuring plan, Aeromexico will be ready to emerge from Chapter 11 as a financially strengthened and better positioned company.

Fernando Gómez, aviation analyst, commented that a judge in U.S approve such a plan and that the investors’ money falls into the airline’s accounts.

If everything goes well for Caballero Águila’s airline, it will be able to exit Chapter 11 as an airline “consolidated, with new capital, with a reconfiguration of its controlling shareholders and in growth, since it has the largest air fleet in the market. ”, He indicated.

According to the Verum analyst, the injection of resources by the third party that will buy shares, as well as by the capital that will be invested by Mexican shareholders, will strengthen the airline’s structure and underpin its growth.

“The aviation sector is not fully recovered. Volaris and Viva Aerobus are recovered and better than before the pandemic, and Aeroméxico has been able to recover somewhat faster than if Interjet continue to operate.

“In their restructuring plan, what they are betting on is to take part of the market left by Interjet, which is attractive for its business model and what is not, will be taken by low-cost airlines,” said Félix.

On June 30, 2020, Aeroméxico began a voluntary financial restructuring process under Chapter 11 due to the difficulties of facing a debt close to 5 billion dollars, after the fall in passenger traffic that caused the pandemic due to Covid-19.

Also read: Aeromexico suffers historic stock market crash; stock sinks 76%


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