Aeromexico shareholders support exit from Mexican stock exchange as part of bankruptcy restructuring

ByDonald L. Leech

Jun 29, 2022

MEXICO CITY, June 28 (Reuters) – Aeromexico said on Tuesday a majority of its shareholders had approved a proposed exit from Mexico’s main stock exchange as part of the airline’s bankruptcy restructuring.

Shareholders on Monday approved a plan to deregister the shares and delist them on the stock exchange in order to launch a buyback program, the company said in a statement.

Aeromexico, which filed for bankruptcy in June 2020 after the coronavirus pandemic reduced travel demand, emerged from bankruptcy protection in March with a $5 billion investment plan and changes to its fleet. . Read more

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Delta Airlines (DAL.N), which held a 49% stake in Aeromexico before Chapter 11 bankruptcy proceedings, ended with a 20% stake. Private equity firm Apollo Global Management (APO.N) became the company’s largest shareholder after Chapter 11. read more

“Aeromexico used its status as a Chapter 11 debtor to negotiate,” said Katie Coleman, co-chair of corporate reorganization and bankruptcy law firm Hughes Hubbard & Reed, who served as lead counsel for Delta. Airlines in this case.

By negotiating with aircraft leasing companies, Aeromexico was able to “really optimize its fleet,” Coleman said.

Aeromexico’s delisting was described in the company’s so-called registration rights agreement in the Chapter 11 proceedings, according to Coleman.

“Old shares are canceled and new shares of a company are issued. Mexican law requires delisting as part of this process,” Coleman said.

The move makes Aeromexico the last Mexican company to go private.

Of the approximately 150 companies listed on Mexico’s main stock exchange, seven, such as dairy producer Grupo Lala, telecommunications company Maxcom and paper producer Bio Pappel, have recently delisted or announced their intention to do so. .

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Reporting by Kylie Madry; Editing by Clarence Fernandez and Kenneth Maxwell

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