Mexicana Unions Get $155 Million Bid to Save Company
Grupo Mexicana de Aviacion SA may return to the skies in December if unions and other creditors accept a 1.9 billion-peso ($155 million) proposal to rescue the bankrupt airline, a government official said.
PC Capital SAPI, a Mexican private-equity firm, is offering the unions 975 million pesos in cash and would arrange a seven- year, 926 million-peso loan paying monthly interest to the workers, Humberto Trevino, deputy minister of transportation, said yesterday. The unions would get an equity stake in exchange for the remaining 2.85 billion pesos Mexicana owes them, he said.
Mexicana, the nation’s largest carrier before its August bankruptcy and shutdown, would return with 28 planes, flying 17 international routes to the U.S. and Central America and seven domestic services, Trevino said in a telephone interview. Creditors including Grupo Financiero Banorte SAB and Mexican development bank Banco Nacional de Comercio Exterior SNC view the proposal favorably, as does the government, he said.
“The unions would be getting compensation more than double what they would receive if Mexicana were to be liquidated,” Trevino said.
PC Capital, led by managing directors Pablo Coballasi and Pablo Cervantes, would retain 35 percent of Mexicana’s pre- bankruptcy workforce, Trevino said. Executives at PC Capital declined to comment, a receptionist said by telephone today.
PC Capital will decide by this week whether to confirm its offer to the government after completing its due diligence, Mexicana said today in a statement. Arturo Barahona, the former chief executive officer of Grupo Aeromexico SA, now Mexico’s biggest airline, has represented PC Capital in the talks, Mexicana said.
In Mexicana’s bankruptcy proceeding in Mexico, the government-appointed arbitrator will seek to broker an agreement between PC Capital and the creditors, Trevino said. After a list of creditors is approved later this month, the parties might reach an accord in “a couple of days,” after which Mexicana would begin the marketing and logistical work to resume flying. The airline would start with a few routes, Trevino said.
Mexicana’s Cia. Mexicana de Aviacion unit filed for bankruptcy protection in Mexico in August and sought Chapter 15 protection in the U.S. The Chapter 15 petition in New York listed more than $500 million in assets and $1 billion in debt. About 1.57 billion pesos was held by Banorte unit Banco Mercantil Del Norte, according to court papers. Mexicana grounded flight operations Aug. 28.
The U.S. case is Compania Mexicana De Aviacion SA de CV, 10-14182; U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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