Delta to acquire part of Aeromexico’s debt

MEXICO – Delta Air Lines announced its intention to acquire US$185 million, plus interest and fees, of Grupo Aeromexico's commitments with Apollo Global Management as part of its financial reorganization under Chapter 11 of the U.S. Bankruptcy Act.

In a letter sent to Javier Arrigunaga, Chairman of the Board of Aeromexico, Delta's Chief Legal Officer, Peter Carter, informed that the U.S. airline has the right to acquire part of Aeromexico's debt for its US$1 billion preferential financing and will do so in the immediate future.

As part of its financial reorganization process, Aeromexico obtained US$1 billion in debtor-in-possession financing (DIP Financing) provided exclusively by Apollo.

This US$185 million is part of Tranche 2 of the DIP Financing, which was worth US$800 million, while Tranche 1 was for US$200 million. Aeromexico has already received the full amount of the financing, which helped it to have a cash balance of US$844 million at the end of May.

Given that Delta has the option to acquire part of Aeromexico's debt, Apollo has the right to require this action by the U.S. airline;

Grupo Aeromexico is currently in the process of presenting its Reorganization Plan and its exit financing; it has until September 8 to do so.

Source: A21