The five major Mexican banks who converted Aéromexico and Mexicana debt into shares last year are about to cash in on the success of those airlines.
Cintra, the parent company for both airlines, plans an international IPO that will offer 20 to 30 per cent of its shares for an estimated US$200 to 300 million. The holding company had delayed the IPO from earlier this year to await further financial results from Aéromexico and Mexicana. Sources close to Cintra now say the IPO is imminent, although its prospectus is not available in the US. Cintra has also hinted at a second offering if the initial float goes well.
Aéromexico and Mexicana are benefiting from a resurgence in Mexico's economy. GDP grew a massive 8.8 per cent during the second quarter, marking its fastest economic growth in 16 years. 'Both airlines are doing very well operationally and financially,' says Fabian Bachrach, managing director of New York-based International Aviation Partners. The Airline Business 100 shows that last year Aéromexico enjoyed the best net margin among the world's top 150 airlines. Mexicana came third, but took the prize for most improved net margin.
The banks planned to sell out sometime over the next five years since acquiring Cintra's shares last year. The good results at Aéromexico and Mexicana mean this will happen sooner rather than later.
Cintra officials are downplaying the effect of any ownership change on management. They expect any new shareholders to follow the same hands-off policy of Cintra's current owners. Mexico's competition commission insists that Aéromexico and Mexicana continue to compete domestically despite common ownership.
David Knibb
Source: Airline Business
