Delta Airlines Would Pay Aeromexico's Debt

Grupo Aeromexico informed that its Chairman of the Board of Directors, Javier Arrigunaga received a day earlier a letter from Delta Airlines' Executive Vice President, Peter Carter, stating "the intention to exercise its option and acquire Apollo's credit rights for 185 million dollars of the tranche 2 commitments". Currently, the U.S. airline has a 49% shareholding, which allows it to operate in Mexico and the United States. Due to the impact generated by the covid-19 pandemic, the Eagle Knight firm initiated a voluntary financial restructuring process in the United States and on August 13, 2020, it was announced that they obtained a commitment for a US$1 billion secured senior secured financing with funds administered by Apollo Global Management Affiliates. The proceeds were divided into two tranches, the first for US$200 million and the second for US$800 million, which have already been delivered to thegroup and can only be used for certain allowable expenses, including certain operating and general corporate expenses, as well as restructuring expenses.

Strategic Alliance

With the message issued on the Mexican Stock Exchange (BMV), "Delta indicated in its notice that such decision is in support of its strategic relationship with Aeromexico and in support of the company's efforts in its restructuring process. According to people involved in the process, no date was set for when Aeromexico's president must respond to the letter from Delta's partner. Following the announcement, the analysis and investment strategy department of Vector Casa de Bolsa reported that the intention to invest in Aeromexico's debt sends a positive signal to the market for a recovery of Aeromexico's situation in the future, where the Mexican airline could be a strategic asset to develop Delta's airline market. In line with its restructuring, Aeromexico recently announced that it terminated early the leases of 19 aircraft, which analysts believe could bring operational benefits to the company by making its fleet more efficient and cutting operating costs of aircraft that were not strategic to the company.