Aeromexico probably needs a lot more than $ 50 million. What could be used is a government bailout. It provides valuable national service as Mexico’s only long-haul airline. But the government is not interested in helping the company.
Mexican airline Aeromexico, which is in the process of reviewing its options for restructuring its short and medium-term financial commitments, received a $ 50 million financial lifeline on Monday by holding company Aimia Inc.
Aeromexico’s shares fell in early June after a newspaper column said it was considering bankruptcy, although the airline later clarified that it had not decided whether to seek Chapter 11 protections in the United States.
Aeromexico and Aimia said in separate statements that they signed a definitive agreement to amend a shareholders’ agreement between them and a commercial agreement between Aeromexico and PLM Premier, the operator of the Club Premier loyalty program.
PLM made an initial $ 50 million loan to Aeromexico under an existing intercompany loan line following the signing of a letter of intent between Aimia and Aeromexico announced on May 12.
“An additional advance of US $ 50 million to Aeromexico by PLM through pre-purchase of award tickets was provided with the execution of the amendments to the commercial contract. This financial support totals US $ 100 million and is guaranteed by Aeromexico’s participation in the PLM ”, said the companies.
Aeromexico and Aimia said they will explore options to leverage PLM’s balance sheet and debt-free cash flows to provide additional resources to shareholders, including a potential leveraged recapitalization of the PLM balance sheet.
“We are delighted to be in a position to use PLM’s robust cash flow and financial attributes to support our partner airline during this challenging period,” said Aimia CEO Phil Mittleman.
As part of the contract, Aeromexico received a seven-year option to purchase Aimia’s 48.9% stake in PLM.
The American airline Delta has a 49% stake in Aeromexico.