April 4 (Bloomberg) -- Concesionaria Vuela Cia. de Aviacion SA, Mexico’s third-biggest airline, has hired Morgan Stanley to sell shares in an initial public offering this year, two people with direct knowledge of the transaction said.
The Mexico City-based company, known as Volaris, will probably sell at least $350 million in stock, said the people, who asked not to be identified because they weren’t authorized to discuss the transaction publicly. Deutsche Bank AG and UBS AG are helping to manage the deal, the people said. The amount and timing are subject to change, they said.
A spokeswoman for the carrier declined to comment on its IPO plans.
Volaris, which had its first flight in 2006, is seeking funding after last year agreeing to buy 44 planes from Airbus SAS in the biggest single commercial aircraft order ever by a Mexican airliner. Companies have raised $4.4 billion in Mexico in share sales this year including IPOs and secondary offerings, compared with $694 million in the same period of 2012.
Like ABC Aerolineas SA, the country’s second-biggest carrier, Volaris has followed the approach pioneered by Southwest Airlines in the U.S., shunning a hub-and-spoke system and focusing on the most profitable routes. The carrier operated more than 10,255 flights in the first two months of 2013, making it the nation’s third-biggest carrier, according to the most current data from the Communications and Transportation Ministry.
Chief Executive Officer Enrique Beltranena said in a February 2012 interview that the company was considering an IPO.
Volaris has received backing from private-equity investors including Pedro Aspe, co-chairman of Evercore Partners Inc., and Nala Investments LLC Chairman Emilio Diez Barroso. Original investors included billionaires Carlos Slim and Emilio Azcarraga, who owned 25 percent each before selling their stakes in 2010 for $80.6 million apiece.
Mexican stock issuance has surged as the country’s four-month-old government, led by Enrique Pena Nieto, pushes for economic reforms including reducing the power of dominant telephone and television companies and opening the country’s energy sector to private investment. Natural-gas distributor Infraestructura Energetica Nova SAB soared 17 percent in its trading debut on March 22.
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