Aeromexico’s Chapter 11 plan accepted by all but one voting class

By Sarah Lizee

Olympia, Wash., Jan. 11 – Grupo Aeromexico, SAB de CV’s Chapter 11 plan was accepted by all but one class of voting creditors, according to a tabulation summary filed Tuesday with the U.S. Bankruptcy Court for the Southern District of New York.

Specifically, 96 holders, or 98.97% in number, of $603.81 million, or 98.86% in amount, of Aerovias and Grupo Aeromexico recourse claims voted to accept the plan, while one holder, or 1.03% in number, of $6.97 million, or 1.14% in amount, voted to reject the plan.

All 22 holders of $61.61 million of general unsecured claims against Grupo Aeromexico voted to accept the plan.

Meanwhile, 93 holders, or 80.87% in number, of $1.43 billion, or 83.65% in amount, of general unsecured claims against Aerovias voted to accept the plan, while 22 holders, or 19.13% in number, of $278.73 million, or 16.35% in amount, voted to reject the plan.

And, 20 holders, or 62.5% in number, of $204.33 million, or 67.75% in amount, of general unsecured claims against Aeromexico Connect voted to accept the plan, while 12 holders, or 37.5% in number, of $97.25 million, or 32.25% in amount, voted to reject the plan.

Also, 105 holders, or 86.07% in number, of $6.45 million, or 87.18% in amount, of unsecured convenience class claims against Aerovias voted to accept the plan, while 17 holders, or 13.93% in number, of $947,861, or 12.82% in amount, voted to reject the plan.

Meanwhile, 29 holders, or 85.29% in number, of $933,939, or 86.22% in amount, of unsecured convenience class claims against Aeromexico Connect voted to accept the plan, while five holders, or 14.71% in number, of $149,288, or 13.78% in amount, voted to reject the plan.

Five holders, or 83.33% in number, of $74,022, or 80.04% in amount, of unsecured convenience class claims against Aeromexico Cargo voted to accept the plan, while one holder, or 16.67% in number, of $18,457, or 19.96% in amount, voted to reject the plan.

All three holders of $1.11 million of general unsecured claims against Aeromexico Cargo voted to reject the plan.

The plan confirmation hearing is scheduled for Jan. 27.

As previously reported, the company filed an amended plan after it had received a joint proposal from the lenders under tranche 2 of its debtor-in-possession financing facility and from existing creditors and new money investors.

The company said that the proposal has the support of strategic partner Delta Air Lines and provides an implementable solution, through a solid group of long-term Mexican investors, to comply with foreign ownership requirements.

Under the amended plan, about $1.3 billion of financing will be raised. The committed parties, excluding Delta and the Mexican investor group, will purchase or fund $600 million in new equity, representing 26.9% of all new issued shares, and $762.5 million in senior secured first-lien notes. About $575 million of the notes will be used to repay tranche 1 of the DIP facility, to fund working capital and for general corporate purposes, and to fund cash distributions to unsecured creditors.

Delta will subscribe and pay for $100 million of new shares and will be required to convert all fully accrued amounts of its tranche 2 loans into new shares at plan equity value. In exchange, Delta will get 20% of all new shares issued under the plan. Also, any or all portions of Delta’s claims against the debtors will be allowed and satisfied under the Chapter 11 plan, and any distributions of new shares on those claims will be added to Delta’s ownership interest.

Apollo Management Holdings will get $150 million in cash, accrued interest under the DIP credit agreement on the outstanding debt under the tranche 2 loans starting on Dec. 31, and 22.38% of all new shares.

Mexican Pension Fund tranche 2 DIP loans will be converted into 3.54% of all new shares.

A cash pool of $450 million will be distributed to unsecured creditors.

Holders of secured claims will receive payment in full in cash or have their claims reinstated.

Holders of other priority claims will be paid in full in cash.

Holders of Aerovias and Grupo Aeromexico recourse claims will receive their pro rata share of the unsecured creditor cash distribution and, to the extent necessary to ensure full recovery of the claims, new stock.

Holders of unsecured convenience class claims against Aeromexico will receive cash equal to the par amount of their claims.

Holders of unsecured convenience class claims against Aerovias, Aeromexico Connect and Aeromexico Cargo will receive a cash payment in an amount equal to the lesser of 30% of the allowed claims or their pro rata share of the unsecured convenience class cash pool.

Holders of customer claims will receive vouchers in the full amount of their claims. However, if a holder elects not to receive a voucher, they will instead receive treatment provided to general unsecured claims or unsecured convenience class claims, as applicable.

Intercompany claims will be reinstated or canceled, potentially without any distribution to holders.

Intercompany interests will be reinstated.

Grupo Aeromexico, a holding company for commercial aviation, is based in Mexico City. The company filed Chapter 11 on June 30, 2020 in the U.S. Bankruptcy Court for the Southern District of New York under case number 20-11563.

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