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Aeroméxico requests financing for $ US 1 billion

Grupo Aeroméxico presented before judge Shelley C. Chapman of the United States Court for the Southern District of New York (the Court) a request for approval of a preferential financing (known, for its acronym in English, as DIP Financing) by 1,000 million dollars, in follow-up to its financial restructuring process that began on June 30, 2020.

As part of the restructuring process, Aeroméxico had announced that it was in the process of obtaining financing, within the Chapter 11 procedure.

Aeromexico expressed at the end of July its confidence that it would finalize the formal commitments for DIP financing that, together with the company‘s available cash and subject to the approval of the competent Chapter 11 court, will provide it with sufficient liquidity to meet its obligations future projects in a timely and orderly manner.

During the second quarter of 2020, the company’s income was 2,608 million pesos, 84.5% below the income registered in the same period of the previous year.

This Thursday, subject to Court approval, the company obtained a commitment for a guaranteed Preferential Financing for a total principal amount of $ 1 billion (DIP Financing) with funds managed by affiliates of Apollo Global Management Inc. (APO).

The DIP Financing consists of: a preferential and guaranteed Tranche 1 of 200 million dollars, and a preferential and guaranteed Tranche 2 of 800 million dollars, in an environment of crisis in the aviation sector.

Aeromexico

DIP Financing resources may only be used for certain permitted expenses, including certain operating and general corporate expenses, as well as restructuring expenses.

Subject to compliance, in each case, of certain milestones, agreements and conditions precedent agreed with the funders, on the date of issuance of the Court order granting provisional authorization (interim) for the DIP Financing and compliance with other conditions, will be available up to 100 million dollars from Tranche 1, and on the date of issuance of the final order of the Court finally approving the DIP Financing and compliance with other conditions, the undrawn part of Tranche 1 will be available in a single exhibition and Tranche 2 amount will be available in an initial outlay of $ 175 million and, subject to the fulfillment of certain milestones and other conditions, subsequent exhibitions of at least $ 100 million each.

Other conditions

The DIP Financing request, which is subject to the approval of the Court, the signing of definitive, main and accessory documents, and the fulfillment of certain conditions for the disposal of the two aforementioned Tranches, will give Aeromexico the necessary liquidity to meet its future obligations, in a timely manner, and to continue with its operations during and after the current voluntary restructuring procedure.

Tranche 2 of the DIP Financing will contain the option, for each creditor of this tranche, to convert their liabilities into shares of the restructured company, with the understanding that the exercise of said conversion option will be subject to the fulfillment of certain conditions and, in in due course, to the corporate and regulatory authorizations for the issuance of the corresponding shares, including the approval of the General Assembly of Aeroméxico Shareholders.

 

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