Grupo Aeroméxico to raise $ 1.3 billion to exit Chapter 11

A total of $ 1.3 billion must be raised by various financial parties to allow Grupo Aeroméxico to exit US Chapter 11 bankruptcy protection, according to motion and notice to review letters of commitment equity and debt filed with the US South District Bankruptcy Court. from New York.

According to this, the parties involved – excluding strategic partner Delta Air Lines (DL, Atlanta Hartsfield Jackson) and Mexican investors – will buy or fund $ 600 million in new capital (representing 26.9% of all new shares). issued), as well as $ 762. 5 million senior secured senior notes.

This follows an agreement on the terms of a revised equity commitment letter and a revised debt commitment letter between the so-called “exit financing parties” consisting of Grupo AeroMexico, its company. major US lender Apollo Global Management Inc, Delta Air Lines, groups of senior shareholders, unsecured creditors and Mexican investors.

Some of the parties involved (other than Delta and the Mexican investors) and / or other third party investors may also provide other exit debt financing through a syndication to be arranged by JPMorgan.

Highlights of the revised equity commitment letter include:

  • Delta will underwrite and pay for $ 100 million in new shares. It will also be required to convert all the fully accumulated amounts of its tranche 2 borrowings into new shares at the value of the plan’s own funds. In return, Delta will receive 20% of all new shares issued under the Chapter 11 exit plan, representing 20% ​​of the share capital of the reorganized Grupo AeroMexico. In addition, all or part of Delta’s claims against debtors will be authorized and satisfied in accordance with the plan of Chapter 11 and any distribution of further actions on such claims will be added to Delta’s ownership.
  • Apollo Management Holdings will receive $ 150 million in cash, accrued interest at the applicable interest rate under the Debtor-in-Possession (DIP) credit agreement on outstanding obligations under the Tranche 2 DIP loans as of December 31, 2021; and 22.38% of all new shares.
  • The Mexican pension fund Tranche 2 DIP loans will convert to 3.54% of all new shares issued under the Chapter 11 exit plan.
  • A cash pool of $ 450 million (including $ 350 million from debtors’ balance sheets and $ 100 million in excess cash) will be distributed to unsecured creditors.

Highlights of the revised debt commitment letter include:

  • Senior Secured Senior Notes in the amount of US $ 762.5 million are to be issued collectively.
  • Of this amount, $ 575 million will be used to repay Tranche 1 of the DIP facility; for working capital and general corporate purposes; payments to senior noteholders and administrative costs; and to fund cash distributions to unsecured creditors.

In the motion, Grupo AeroMexico said the revised exit funding proposals provided for sufficient exit funding for a successful Chapter 11 exit and also resolved several other complex issues with broad stakeholder support, which would allow debtors to continue towards a more consensual and faster confirmation of the restructuring plan. “Put simply, this is the only viable route for debtors,” he said.


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