U.S. Court approves financing for Aeromexico of up to US$1 billion for its restructuring.

Aeromexico Group, which operates the largest airline in the country, said a U.S. court for the southern district of New York authorized a request for preferential financing of up to $1 billion dollars that will allow it to maintain liquidity during its current restructuring.

Aeromexico, which like other airlines in the world has been hit hard by a collapse in demand due to the coronavirus pandemic, is since late June in a process of financial restructuring under Chapter 11 of the U.S. bankruptcy law.

The airline said in a statement Wednesday night that the funding will provide it with liquidity to meet its future obligations “in a timely and orderly manner,” and to continue operations during and after the restructuring process.

Aeromexico applied last week to that U.S. court for approval of the preferential financing request.

As part of its restructuring, the airline announced on Wednesday an agreement with title holders to refrain from collecting financial obligations during the coming months. Aeromexico will make only a partial payment of interest on a debt issue, they said.

The interest payment, for a total amount of 525,000 pesos (almost US$25,000), will be made this Thursday and corresponds to one of the tranches of its stock certificates identified as AEROMEX00320.

The agreement will be effective once it receives the approval of the U.S. Court for the Southern District of New York, the company said in a statement.

By Reuters