Milbank LLP represented equity and debt investors The Baupost Group, L.L.C., Oaktree Capital Management, L.P., and Silver Point Capital, L.P. (the “Plan Investors”) in connection with an aggregate $1.5 billion exit financing and successful chapter 11 reorganization of leading Mexican airline Grupo Aeroméxico S.A.B. de C.V. (collectively with its affiliates, “Aeroméxico”).
Aeroméxico, Mexico’s leading air carrier, filed for chapter 11 bankruptcy protection on June 30, 2020 with approximately $2 billion in funded debt obligations and liquidity concerns owing to the Covid-19 pandemic’s negative effects on passenger demand. Beginning in May 2021, as contemplated under its DIP Credit Agreement, Aeroméxico reached out to its existing stakeholders and third party investors to gauge their interest in providing exit financing.
After months of hard-fought negotiations and court-ordered mediation, Aeroméxico selected an exit financing proposal provided by, among others, the Plan Investors. Aeroméxico’s plan of reorganization implements this exit financing, which includes $720 million of new equity and $762.5 million in new first lien notes. The plan was confirmed on January 28, 2022 following a contested confirmation hearing and eventual global settlement among the Plan Investors and other key case constituencies. Through the plan and the exit financing, Aeromexico was able to emerge from bankruptcy on March 17, 2022 with a strong financial footing and sufficient capital to invest in its fleet and compete going forward.
The Milbank team was led by Financial Restructuring partners Dennis Dunne, Andrew Leblanc, and Matthew Brod, and included partners Scott Golenbock (Corporate), Russell Kestenbaum (Tax), Al Pisa (Alternative Investments), and Carlos Albarracin and Paul Denaro (Global Capital Markets); special counsels Melanie Westover Yanez (Litigation & Arbitration) and Sean Strasburg (Global Capital Markets); and associates Justin Cunningham (Financial Restructuring) and Thomas Quinn (Litigation & Arbitration), among other Milbank attorneys.
