Grupo Aeroméxico emerges from chapter 11
Davis Polk has served as lead counsel to Grupo Aeroméxico, S.A.B. de C.V. and certain of its affiliates (collectively, “Aeroméxico”) in connection with their chapter 11 proceedings in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). The Bankruptcy Court entered an order approving Aeroméxico’s joint plan of reorganization (the “Plan”) on February 4, 2022. The cornerstone of the Plan was an exit financing facility that provided Aeroméxico with $720 million of new equity capital through the issuance of new equity and up to $762.5 million of new debt capital through the issuance of senior secured first-lien notes. Aeroméxico emerged from bankruptcy on March 17, 2022.
Through the chapter 11 process, Aeroméxico overhauled, updated and restructured its aircraft fleet, resulting in almost $2 billion in savings on ongoing fleet obligations, and reached comprehensive settlements with all of its unionized labor groups (which represent almost 70% of Aeroméxico’s 13,000 employees). In addition, the exit financing approved in the chapter 11 cases will, among other things, finance a transaction that will result in PLM Premier, S.A.P.I. de C.V. – the owner and operator of Club Premier, Aeroméxico’s loyalty program – becoming a wholly owned subsidiary of Aeroméxico.
Aeroméxico is Mexico’s flagship carrier and the leading Mexican airline in terms of fleet size and network. Aeroméxico, which began its operations in 1934, offers passengers a full-service, premium experience to 85 global destinations, including every major city in Mexico. As a founding member of SkyTeam, an alliance of 19 international airlines dedicated to providing passengers with a seamless travel experience, Aeroméxico connects Mexico with the world. In addition, Aeroméxico has a strategic partnership with Delta that provides unique passenger flows in the Mexico-USA market, one of the most dynamic markets in the world.
The Davis Polk restructuring team included partners Timothy Graulich and Marshall S. Huebner, counsel Stephen D. Piraino, Josh Sturm and Steven Z. Szanzer and associates Stephen Ford, Richard J. Steinberg and Matthew Bruno Masaro. The litigation team included partner James I. McClammy and associate Cristina M. Rincon. The finance team included partner Vanessa L. Jackson and associate Adela Troconis. The mergers and acquisition and corporate teams included partner Maurice Blanco and associate Ernesto Talamás Velázquez. Members of the Davis Polk team are based in the New York and São Paulo offices.