An already heated debate about Mexicana de Aviacion’s debt obligations has exploded in the past few days as creditors scramble to regain losses incurred by the carrier’s grounding in August 2010.
At issue is a legal obligation by Mexicana to gain the approval of 51% of its creditors by value for any reorganization plan, which enables the company to proceed with its court-protected restructuring with the backing of just a small number of creditors holding large amounts of debt.
In the past several weeks, an investment group known as Med Atlantica has emerged as a candidate to take over Mexicana and proceed with the bankruptcy reorganization plan, which has already been approved by the requisite number of creditors and the carrier’s labor groups.
Med Atlantica just last week committed to that reorganization plan and its passage through the bankruptcy court even though talks with Mexican regulators about the issue of an operating certificate had reached an impasse. That commitment, however, has brought a flurry of accusations from aggrieved creditors who claim they have had no contact with the airline.
The complaints, from groups including travel agents and government agencies, mirror previous campaigns against investment groups interested in reviving Mexicana, but this latest round also has piqued the interest of political leaders, who are preparing for a general election this year. Committee hearings are now being scheduled, although agendas have yet to be issued.
Regardless of the outcome, this scrutiny places in doubt the success of Med Atlantica’s takeover bid, as it may delay a proposed late April return to service for the carrier. The next few days may provide some answers, but until they come, the prospect of Mexicana’s revival is becoming less likely.