RESCUE BIDS FOR MEXICANA COLLAPSE

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By admin May 10, 2011 10:45

RESCUE BIDS FOR MEXICANA COLLAPSE

Attempts to revive Mexicana de Aviacion from bankruptcy protection are looking unlikely to succeed as subsequent bids fail. The airline’s current bankruptcy protection ends on June 30 – this has already been extended by 90 days – a second request is not expected to be made.

The most recent bid to finance a $250 million buy out by TG Group collapsed last week after the consortium failed to prove it has sufficient funds. An earlier bid by PC Capital also failed due to insufficient funding
The final two bidders are Ivan Barona and Avanza Capital, who have both already proved access to $350 million and €250 million (US$358 million), respectively. An announcement is expected from the bankruptcy conciliator by next week. Mexico’s Ministry of Transportation and Communications, the Secretaria de Comunicaciones y Transportes, will have to subsequently approve any accepted bid.

Although the news is positive, because the airline has been in this situation before, media reports are less sure as the airline reaches two months from complete closure and the acceptance of the end of Mexicana as an airline. Should this happen, Mexicana MRO facility must be spun off before June 30 to avoid exposure to debt obligations at the parent company.

admin
By admin May 10, 2011 10:45
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