Citigroup's Mexican arm promises no major changes for flag carrier and a $240 million cash injection
In a photo finish, a group comprised of Citigroup arm Banamex and 14 Mexican businessmen has emerged as the winning bidder and new majority owner of Aeromexico.
The Banamex-led bid, which values the airline at $248.6 million, came less than 30 seconds before the mid-October bidding deadline. Mexico's Saba family lodged a higher bid of $249.1 million three minutes later, which was rejected as too late. Despite complaints about the bidding process and suggestions in some quarters of a political payback, the Sabas accepted defeat and said they would not appeal.
Mexicana's owners also made an early bid but the competition authorities in Mexico ruled out any possible Aeromexico-Mexicana merger. Mexicana's owners appealed the decision but this will likely be dropped.
The Banamex group will buy the 62% stake in Aeromexico held by the Mexican government, plus any shares that others agree to sell at the accepted bid price. The purchase will only cost the winning group the full $248.6 million if they buy all of Aeromexico's shares. The group has also agreed to inject $240 million into the airline over the next 90 days, and assume $1 billion in Aeromexico debt.
The 14 other members of the Banamex group are prominent Mexican businessmen which combined have a 51% stake in the consortium. Several are affiliated with the Modelo brewing giant. Jose Luis Barraza, the group's spokesman, is ex-president of Mexico's enterprise co-ordinating council and will become Aeromexico's new chairman.
The new owners have promised to make no major changes in Aeromexico and to give 4% of its shares to the pilots. "The pilots will be shareholders and will have a seat on the council of administration [board of directors] of Aeromexico," Barraza says.
One cloud still hangs over the winning bid. Banamex is the Mexican arm of Citigroup, a US company. Banamex holds a 49% stake in the bidding group, which could raise questions about whether it meets Mexico's 25% foreign cap on airline ownership. The purchase of Aeromexico is part of a series of investments Citigroup is planning across Latin America.
Source: Airline Business
