Aeromexico shareholders support capital increase as part of restructuring plan

An Aeromexico Boeing 737 MAX 9 fuselage, which is among new aircraft incorporated into its fleet, is pictured at Benito Juarez International Airport in Mexico City, Mexico July 14, 2021. Picture taken July 14, 2021. REUTERS/Luis Cortes

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MEXICO CITY, Jan 17 (Reuters) – Mexican carrier Aeromexico said on Monday its shareholders had approved a capital increase as part of its restructuring plan to emerge from bankruptcy.

In two meetings on Friday, shareholders agreed to increase share capital by $4.267 billion, subject to a third party making a tender offer for its current shares.

The increase will come from the issuance of some 682 trillion common shares, which will be paid for by debt capitalization of $3.44 billion and an injection of $828 million.

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Aeromexico’s largest creditor in its U.S. Chapter 11 case, Apollo Global Management , will swap debt for equity as part of the reorganization, becoming the airline’s largest shareholder . Read more

Delta Air Lines Inc (DAL.N), which controlled the majority of Aeromexico before the bankruptcy, will own about a fifth of its shares after it emerges from bankruptcy.

Aeromexico has 682.1 million shares outstanding. Current shareholders will see their holdings virtually wiped out.

Aeromexico (AEROMEX.MX) also said shareholders have agreed to issue an additional 68.2 trillion shares, which will remain in the company’s treasury.

A company spokesperson declined to comment on the decision.

Aeromexico, which was hit hard in 2020 by the coronavirus pandemic, filed for Chapter 11 bankruptcy in a US court in July 2020.

Last week, Aeromexico said creditors had approved the company’s restructuring plan in a Jan. 7 vote. Read more

The plan must now be approved by the US bankruptcy court on January 27, according to Aeromexico.

Shares of the company have fluctuated wildly over the past month since announcing it would sell its outstanding shares to an anonymous third party for 0.01 Mexican pesos each. Read more

After Monday’s announcement, shares of Aeromexico rose 5.38% to 1.96 pesos.

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Reporting by Kylie Madry; Editing by Leslie Adler

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