Grupo Aeromexico reorganization plan rests on new equity, debt financing

Grupo Aeromexico has filed a reorganization plan that includes a financing proposal largely backed by a group of senior noteholders and unsecured creditors and allow the carrier to shed $1b from its debt stack. In court papers filed late Friday, Aeromexico says it is continuing to “actively negotiate with various stakeholders regarding an exit financing package” based on the noteholders and trade creditors’ joint proposal to bring in as much creditor support for the plan as possible. The airline, represented by Davis Polk & Wardwell, filed for Chapter 11 in June 2020 with $2b in debt, blaming the downturn in travel demand caused by the COVID-19 pandemic. Aeromexico plans to ask US Bankruptcy Judge Shelley Chapman in Manhattan to grant approval for it to begin soliciting creditor votes on the plan at a hearing on Oct. 25. The joint proposal includes $1.1875b in new equity and $537.5m in new secured debt. The new financing would be used to refinance or pay off all or some of $1b in loans used to fund operations during the bankruptcy. It would also be used to cover costs necessary to emerge from Chapter 11, to set up a cash-out option for general unsecured creditors and acquire Aimia Holdings UK Ltd’s interest in the airline's travel loyalty program, PLM Premier.<br/>