Aeroméxico has filed a $1billion debtor-in-possession (DIP) financing motion for funds from Apollo Global Management, as part of moves to strengthen the carrier’s liquidity as it navigates Chapter 11 bankruptcy in the US.
Aeromexico becomes the second Latin American carrier to file a DIP motion after LATAM did so in May. On August 13 the Mexican carrier went before Judge Shelley C. Chapman of the United States Bankruptcy Court for the Southern District of New York, as a follow-up to the financial restructuring process started on June 30.
Aeromexico has received, subject to court approval, commitments for a $1billion senior secured superpriority multi-tranche DIP term-loan facility with funds managed by affiliates of Apollo Global Management.
The DIP Facility consists of a senior secured Tranche 1 facility of $200 million, and a senior secured Tranche 2 facility of US$800 million. Proceeds from the DIP Facility may only be used for certain permitted expenses, including certain working capital expenses and general corporate purposes, as well as restructuring costs, according to the carrier.
Andrés Conesa, chief executive of Grupo Aeromexico, said, "This is a critical milestone in the ongoing process to transform our Company with the goal of driving long-term, sustainable growth for Aeromexico. Throughout this process, we will continue to provide our customers with the exceptional service and flight experience they expect from Aeromexico, and we will continue all day-to-day operations, albeit under these extraordinary COVID-19-related circumstances. This milestone is a recognition of Aeromexico's fundamentally solid operating business and proven strategy."
The Tranche 2 DIP Facility, may be converted, at the lenders' option, into shares of reorganised Aeromexico.