Aeromexico shareholders back capital increase in restructuring plan.

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Mexican carrier Aeromexico said on Monday that its shareholders have approved a capital increase as part of its restructuring plan to emerge from bankruptcy.

In two meetings held on Friday, shareholders agreed to hike the share capital by $4.267 billion, which is subject to a third party making a public tender offer of its current shares.

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The increase will come from the issuance of some 682 trillion common shares, which will be paid for through a $3.44 billion debt capitalization and an $828 million injection, Reuters reported.

Aeromexico’s biggest creditor in its U.S. Chapter 11 case, Apollo Global Management, will swap its debt into equity as part of the reorganization, becoming the airline’s largest stakeholder.

Delta Air Lines, which had controlled a majority of Aeromexico before the bankruptcy, will hold roughly a fifth of its stock coming out of bankruptcy.

Aeromexico has 682.1 million shares in circulation. Existing equity shareholders will see their stakes essentially wiped out.

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Aeromexico also said shareholders had agreed to issue another 68.2 trillion shares, which will remain in the company’s treasury.

Aeromexico declared Chapter 11 bankruptcy before a U.S. court in July 2020.

The plan now faces approval of the U.S. bankruptcy court Jan. 27, according to Aeromexico.

The company’s shares have sharply fluctuated over the past month since it said it would sell its outstanding shares to an unnamed third party for 0.01 Mexican peso each.

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