Aeromexico Draws Third and Final Disbursement Under DIP Financing

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Feb 19, 2021, 13:26 ET

MEXICO CITY, Feb. 19, 2021 /PRNewswire/ -- Grupo Aeroméxico, S.A.B. de C.V. ("Aeromexico" or the "Company") (BMV: AEROMEX). As a follow up to our previous relevant events regarding (a) securing the commitment of a US$1,000 million senior secured superpriority multi-tranche debtor in possession term loan facility (the "DIP Facility"), (b) the initial funding of US$100 million of Tranche 1 loans under the DIP Facility, (c) the final approval of the DIP Facility by Judge Shelley C. Chapman of the United States Bankruptcy Court for the Southern District of New York (the "Chapter 11 Court"), and (d) the second disbursement of the undrawn portion of the Tranche 1 facility (US$100 million) and of the initial funding of US$175 million of Tranche 2 loans, the Company announces that the conditions to drawing the remaining undrawn commitments of the Tranche 2 facility (US$625 million) have been met and, accordingly, the Company has requested such final disbursement.

Andrés Conesa, CEO of Aeromexico, commented: "The funding of the final disbursement is a key milestone in Aeromexico's ongoing, voluntary restructuring process that will provide us with sufficient liquidity to support our continued operations during this time and with the flexibility to continue our orderly restructuring process with the objective of emerging stronger. We recognize and appreciate the continuing support from my fellow co-workers, Board of Directors, authorities and all stakeholders."

As we reported in our relevant event of August 13, 2020, the Tranche 2 DIP Facility may be converted, at the lenders' option, into shares of reorganized Aeromexico, subject to certain conditions and the applicable corporate and regulatory approvals (including at the Aeromexico's shareholders meeting) for the issuance of the corresponding shares. In order to effectuate (i) the debt-into-equity conversion of the allowed unsecured claims recognized in our Chapter 11 process at a to-be-determined ratio, and (ii) the conversion of the Tranche 2 DIP Facility, the shareholders meeting of the Company would need to approve a capital increase. As we had anticipated, if the lenders exercise the option to convert the Tranche 2 DIP Facility, following the corresponding capital increase, the shareholders will be almost fully diluted so that their remaining equity stake will likely be minimal (if any), provided that shareholders (other than those that have agreed not to exercise preemptive rights pursuant to the Shareholder Support Agreement) will be allowed to exercise their preemptive rights subject to several conditions that are yet to be determined.

The price of our common stock has been volatile following the commencement of our Chapter 11 process and may significantly decrease in value in the future. Therefore, any trading in our common stock during the pendency of our Chapter 11 process is highly speculative and involves substantial risks to buyers of our stock. Future recoveries in our Chapter 11 process for our shareholders will depend upon our ability to negotiate and confirm a Plan of Reorganization, the terms of such Plan, the recovery of our business from the COVID-19 pandemic and the future value of our assets upon conversion of our liabilities. Although at this stage we cannot predict how our common stock will eventually be treated under a Plan, we believe that it is unlikely that stockholders would receive a recovery through a Plan since it is expected that the holders of unsecured indebtedness will not be paid in full and will need to convert their claims into new stock to be issued by the Company. Consequently, there is a significant risk that our stockholders may receive no recovery, or a nominal recovery, under our Chapter 11 process.

Certain statements contained or incorporated by reference in this relevant event include "forward-looking statements". Forward-looking statements include information concerning the Company's liquidity and its possible or assumed future results of operations, including descriptions of its business strategies. These statements often include words such as "believe," "expect," "project," "potential," "anticipate," "intend," "plan," "estimate," "seek," "will," "may," "would," "should," "could," "forecasts" or similar expressions. These statements are based on certain assumptions that the Company has made in light of its experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors it believes are appropriate in these circumstances under our chapter 11 process. The Company believes these judgments are reasonable, but you should understand that these statements are not guarantees of performance or results, and the Company's actual results could differ materially from those expressed in the forward-looking statements due to a variety of important factors, both positive and negative, that may be revised or supplemented in subsequent relevant events. Among other items, such factors could include: the Company's ability to navigate the chapter 11 process, including obtaining Chapter 11 Court approval for certain requirements, complying with and operating under the requirements and constraints of the U.S. Bankruptcy Code, negotiating and consummating chapter 11 plan, developing, funding and executing the Company's business plan and continuing as a going concern; the value of the Company's common stock due to the chapter 11 process; levels of travel demand, particularly with respect to business and leisure travel in Mexico and in global markets; the length and severity of the COVID-19 pandemic and the impact on the Company's business as a result of travel restrictions and business closures or disruptions; the impact of the COVID-19 pandemic and actions taken in response to the pandemic on global and regional economies and economic factors; general economic uncertainty and the pace of economic recovery, including in key global markets, when the COVID-19 pandemic subsides; the risk of an "ownership change". Our investors should not place undue reliance on forward-looking statements. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements; all such statements speak only as of the date made, and the Company undertakes no obligation to update or revise publicly any forward-looking statements whether as a result of new information or otherwise.

Aeromexico will continue pursuing, in an orderly manner, its voluntary financial restructuring through Chapter 11, while continuing to operate and offer services to its customers and contracting from its suppliers the goods and services required for operations. The Company will continue to strengthen its financial position and liquidity, protect and preserve its operations and assets, and implement the necessary adjustments to face the impact from COVID-19.

About Grupo Aeromexico Grupo Aeroméxico, S.A.B. de C.V. is a holding company whose subsidiaries are engaged in commercial aviation in Mexico and the promotion of passenger loyalty programs. Aeromexico, Mexico's global airline, has its main operations center in Terminal 2 of the Mexico City International Airport. Its destination network has reach in Mexico, the United States, Canada, Central America, South America, Asia and Europe. The Group's current operating fleet includes Boeing 787 and 737 aircraft, as well as the latest generation Embraer 190. Aeromexico is a founding partner of SkyTeam, an alliance that celebrates 20 years and offers connectivity in more than 170 countries, through the 19 partner airlines. Aeromexico created and implemented a Health and Hygiene Management System (SGSH) to protect its clients and collaborators at all stages of its operation.

www.aeromexico.com www.skyteam.com

SOURCE Grupo Aeromexico, S.A.B. de C.V.