Willkie Farr & Gallagher LLP
Akin Gump Strauss Hauer & Feld LLP
Gibson, Dunn & Crutcher LLP
Morris, Nichols, Arsht & Tunnell LLP
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(Reuters) – Mexican airline Grupo Aeromexico SAB de CV has filed a reorganization plan that features a financing proposal largely backed by a gaggle of senior noteholders and unsecured collectors and permit the service to shed $1 billion from its debt stack.
In court papers filed late Friday, Aeromexico says it’s persevering with to “actively negotiate with various stakeholders regarding an exit financing package” primarily based on the noteholders and commerce collectors’ joint proposal to herald as a lot creditor assist for the plan as attainable.
The airline, represented by Davis Polk & Wardwell, filed for Chapter 11 in June 2020 with $2 billion in debt, blaming the downturn in journey demand attributable to the COVID-19 pandemic.
Aeromexico plans to ask U.S. Chapter Choose Shelley Chapman in Manhattan to grant approval for it to start soliciting creditor votes on the plan at a listening to on Oct. 25.
The joint proposal contains $1.1875 billion in new fairness and $537.5 million in new secured debt. The new financing can be used to refinance or repay all or a few of $1 billion in loans used to fund operations through the chapter. It might even be used to cowl prices essential to emerge from Chapter 11, to arrange a cash-out choice for common unsecured collectors and purchase Aimia Holdings UK Ltd’s curiosity within the airline’s journey loyalty program, PLM Premier.
The joint proposal places Aeromexico’s complete enterprise worth at $5.4 billion. Aeromexico says the plan would save almost 13,000 jobs worldwide.
The service says it acquired three proposals to fund its exit from chapter this summer time, two of which got here from the noteholders and the commerce collectors and have been ultimately mixed into one. The third proposal was submitted by Apollo World Administration Inc, which offered the $1 billion mortgage to fund operations through the chapter.
Although it initially really helpful the Apollo provide to its board, Aeromexico mentioned in Friday’s filings that the joint proposal “would deliver the greatest value to its creditors and positions the Company for long-term profitability and growth.”
Mediation among the many events is ongoing, in accordance with the disclosure assertion.
VR World Companions LP is the biggest holder of debt within the advert hoc senior noteholders group with $95 million in notes as of Sept. 17, in accordance with court docket papers. Nut Tree Capital Administration LP, with $150 million in unsecured claims, is the biggest member of the advert hoc unsecured collectors’ group.
The official unsecured collectors’ committee, represented by Willkie Farr & Gallagher, is separate from the unsecured group concerned with the joint proposal.
Aeromexico was certainly one of three main Latin American airways to file for chapter in the USA in 2020, alongside Colombia’s Avianca SA and Chile’s LATAM Airways Group SA.
The airline is hoping to carry a listening to on its proposed plan on Nov. 29 earlier than Chapman.
The case is In re Grupo Aeromexico SAB de CV, U.S. Chapter Court docket, Southern District of New York, No. 20-11563.
For the debtors: Marshall Huebner, Timothy Graulich and James McClammy of Davis Polk & Wardwell; and Derek Abbott and Andrew Remming of Morris Nichols Arsht & Tunnell
For the advert hoc group of senior noteholders: David Botter, Abid Qureshi and Jason Rubin of Akin Gump Strauss Hauer & Feld
For the advert hoc group of unsecured collectors: Joshua Brody, Scott Greenberg and Matthew Williams of Gibson, Dunn & Crutcher
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Maria Chutchian studies on company bankruptcies and restructurings. She may be reached at [email protected]