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  HOME | Mexico

Mexicana de Aviacion’s Liabilities Total $725 Million, Government Says

MEXICO CITY – The liabilities of Mexicana de Aviacion, which ceased operating in August, total about 9 billion pesos (some $725 million), Communications and Transportation Secretary Juan Molinar said.

Some investors have expressed an interest in the bankrupt carrier, but they would have to assume these liabilities to get the airline flying again, the secretary said.

Mexicana, which had been one of Mexico’s two leading airlines, stopped operating “indefinitely” on Aug. 28 along with sister budget carriers Click and Link due to serious financial problems.

Molinar said he agreed with Labor Secretary Javier Lozano that the airline’s situation “is very difficult,” but he refused to confirm that liquidation was “imminent.”

Previous administrations bailed out Mexicana de Aviacion when it stumbled in the past, and the current government “will do everything necessary” to prevent liquidation, Molinar said.

The communications and transportation secretary, however, said government funds would not be injected into the carrier to prevent it from disappearing.

“If we find some investor who is willing to reach an agreement with all the creditors, including the unions, then the company would be saved; otherwise, it will be very difficult,” Molinar said, adding that “we are going to make some decisions soon.”

Other companies are making aggressive and large investments to fill the hole in the market left by Mexicana, the communications and transportation secretary said.

The carrier’s problems present “growth opportunities for Aeromexico, Volaris, Interjet and other Mexican companies that could pick up the demand not being filled by Mexicana de Aviacion, but we are going to look at that soon,” Molinar said.

Prior to selling its stake in the airline to Mexican investment group Tenedora K for the symbolic price of 1,000 pesos ($77), lead shareholder Grupo Posadas filed for bankruptcy Aug. 2 in both Mexican and U.S. courts, while asking airline employees to agree to sweeping layoffs and big pay cuts.

On Sept. 7, a Mexican judge allowed the airline to suspend payment on its debt and left it in the hands of a court-appointed receiver.

The receiver is examining the bankrupt carrier’s viability and possible debt-restructuring agreements.

The lower house of Mexico’s Congress named a commission to investigate allegations of “fraudulent management” during the tenure of Mexicana’s former chairman, Gaston Azcarraga. EFE
 

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