The actions of Aeromexico Group were near the lowest price recorded in its history, as the airline takes the final steps to exit the Chapter 11
Stocks fell this Wednesday 29 percent to 0.41 pesos when the window closed for a voluntary public offering that will substantially dilute existing shareholders. It is expected that in the course of the day the price will reach zero.
At the end of January, Aeroméxico obtained judicial approval to exit the financial restructuring of its debts to which it underwent when entering the Chapter 11 of the United States Bankruptcy Law.
Following the restructuring, a group of strategic Mexican shareholders will obtain a 4.1 percent stake in the company. Apollo Global Management, which led the debtor-in-possession financing, will retain a stake of about 22 percent, while Delta will have 20 percent. The remaining shares will be distributed among new investors and creditors.
The largest shareholder of the airline, Delta Air Lines, did not participate in the offer, according to an earlier announcement. That left up to 49 percent of the shares to be acquired before dilution, which will represent less than 0.01 percent of the total shares after the plan takes effect.
Aeroméxico’s shares have been involved in the so-called stock market frenzy.
Even after it became clear in December that shareholders would be lucky to get a penny a share, Aeroméxico’s share price soared to its highest level since 2013 as it rose and fell over the past three months. The volume was fueled by a rush of retail investors adopting new trading platforms, traders said.
The local brokerage firm Mexican Securities Group sent emails to clients of its GBM+ platform, warning them that the shares would be worthless after compounding. The firm did not immediately respond to a request for comment.
Aeroméxico estimates the value of the company’s stock plan at $2.6 billion and expects shares to trade at around 401.68 pesos ($18.79) as of Thursday, according to a previous statement.