Friday, December 1, 2023

Aeroméxico exits Mexican stock exchange

Grupo Aeroméxico, one of Mexico’s major airlines, formally exited the Mexican stock exchange (Bolsa Mexicana de Valores, BMV) on Wednesday and will reportedly seek a more liquid market in the U.S.

The delisting is part of the company’s bankruptcy agreement. Mexican law requires that companies delist from the Mexican stock exchange as part of the process of issuing new company shares. 

In June, its shareholders approved a plan to cancel the registration of shares and remove the stock exchange listing as part of a buy-back program. Delta Airlines ended the agreement with a 20% share, down from the 49% it previously held. Private equity firm Apollo Global Management is now the company’s largest shareholder. 

While the airline had emerged from the Chapter 11 bankruptcy process in March, the court formally closed the case on Dec. 22, stating that Aeroméxico’s reorganization plan “has been substantially consummated.” 

The company first filed for bankruptcy in June 2020 in the midst of the Covid-19 pandemic and associated travel restrictions and slowdowns. The Mexican government did not provide financial support to the airline, which forced it to declare bankruptcy. 

Several other regional airlines faced similar situations, including Avianca and LATAM Airlines Group. Some airlines, such as Interjet and TAME, ceased operations. 

Aeroméxico spent 20 months on its voluntary reorganization. During this time it renegotiated with lessors, manufacturers, employees and creditors to better manage its debt. By the end of the Chapter 11 process, it obtained over U.S. $3.7 billion in unsecured loans and capital contributions. The airline plans to invest about U.S. $5 billion in the next five years. 

“We look forward to starting a new chapter in our company’s history, backed by a sound financial base, solid capital structure, and investors who have full confidence in our future. As we move forward, we will not only continue to streamline our company to become even more sustainable, resilient, and competitive, but we will also significantly expand our network and fleet,” Aeroméxico CEO Andrés Conesa said. 

Aeroméxico registered a net loss of nearly U.S. $200 million between January and September of 2022. However, it managed to make a profit in the third quarter of the year, with revenues amounting to U.S. $1.07 billion. 

With reports from Reuters, Simple Flying and Bloomberg

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