Background on Grupo Aeroméxico and its Significance
Grupo Aeroméxico, Mexico’s flagship airline, is refining details for its Initial Public Offering (IPO) aiming to sell just over 10% of its social stock to public investors. This will be achieved through a primary and secondary offering simultaneously in the Mexican and U.S. stock markets.
Understanding American Depositary Shares (ADS)
According to the latest preliminary prospectus filed with the SEC, each American Depositary Share (ADS), equivalent to 10 ordinary shares, is expected to be priced between $18 and $20 per share.
Potential Stock Division
Aeroméxico has warned that it might be required to split its single class of shares into three due to Mexican Foreign Investment Directorate and the Foreign Investment Law requirements. The aviation sector is deemed strategic, necessitating corporate safeguards to ensure Mexican investor control.
IPO Details
In total, Grupo Aeroméxico and a group of Mexican shareholders will offer 144,736,840 shares. At the midpoint of the proposed range, this equates to a placement worth approximately $275 million.
Based on these references, Aeroméxico would reach a valuation close to $2.59 billion. The amount could increase if underwriters exercise the over-allotment option, reserving an additional 21,710,500 shares for this purpose.
The IPO is expected to occur before the end of 2025, following SEC approval for the registration.
Return to Public Market
Aeroméxico will return to being a public company after three years outside the stock market, following its restructuring due to the COVID-19 pandemic’s impact. The pandemic severely reduced its revenues, leading the airline to seek Chapter 11 bankruptcy protection in the U.S.
During this process, new shareholders (including Apollo Global Management) joined, and a capital restructuring diluted previous investors’ stakes almost entirely.
IPO Composition
The IPO will consist of a primary portion, allowing Aeroméxico to secure fresh funds for strengthening its financial and operational structure. Most current shareholders will use the offering to sell parts of their shares.
Notable current shareholders include Mexican entrepreneurs Valentín Díez Morodo, the Tricio Haro brothers (Eduardo, Rafael, and José Antonio), and the Banco Actinver Fideicomiso F/5292, holding 5.9% of the capital and ranking as the fifth-largest shareholder behind Apollo (22.4%), Delta Air Lines (20%), SVP (7.7%), and Silver Point Capital (9.7%).
Key Questions and Answers
- What is the purpose of Aeroméxico’s IPO? The primary goal is to sell just over 10% of its social stock to public investors, with proceeds aimed at strengthening the airline’s financial and operational structure.
- What are American Depositary Shares (ADS)? ADS represent ownership in a foreign corporation’s stock that is held by a U.S. depositary institution. In this case, each ADS corresponds to 10 ordinary shares of Grupo Aeroméxico.
- Why might Aeroméxico need to split its shares? Due to the strategic nature of the aviation sector in Mexico, Aeroméxico may be required to divide its single class of shares into three to meet corporate safeguards and ensure Mexican investor control.
- What is the expected valuation of Aeroméxico post-IPO? Based on the proposed midpoint of the share price range, Aeroméxico’s valuation would be approximately $2.59 billion.
- Who are the major shareholders in Aeroméxico? Key shareholders include Valentín Díez Morodo, the Tricio Haro brothers, and Banco Actinver Fideicomiso F/5292. Notable external investors are Apollo Global Management, Delta Air Lines, SVP, and Silver Point Capital.
