Aeroméxico files NYSE IPO with backing from Apollo, Delta Air Lines

By Steve Gelsi

Mexico City-based carrier emerged from bankruptcy in 2022 and is generating profits

Grupo Aeroméxico S.A.B. de C.V. has filed plans to go public on the New York Stock Exchange about two years after it emerged from Chapter 11 bankruptcy with backing from Apollo Global Management Inc.

The Mexico City-based carrier plans to offer American Depositary Shares under the symbol AERO with underwriters Barclays, Morgan Stanley, JPMorgan, Evercore ISI and Apollo Global Securities, according to a late Monday filing.

The company has yet to propose any financial terms for the IPO with an estimated price range, number of shares to be offered and dollar proceeds.

Mexico City-based Aeroméxico said it's "uniquely positioned" as the only full-service carrier based in Mexico and the only airline offering long-haul, widebody service connecting every major city in Mexico and 43 international cities in 22 countries.

Although the COVID-19 pandemic derailed its business and forced it into bankruptcy in 2020, Aeroméxico rang up operating income of $716 million on revenue of $4.9 billion in 2023. It reported $203 million in operating income in 2023 on revenue of $3.8 billion.

Apollo Global Management (APO) currently owns about 22.4% of Aeroméxico's stock - or about 30.5 million shares.

Delta Air Lines Inc. (DAL) owns about 20% of the company - or 27.28 million shares.

Apollo emerged as the largest shareholder in the company after it provided a $1 billion loan to Aeroméxico as part of its debt restructuring in 2022.

About $650 million of the original principal amount was converted into equity.

Andrés Conesa Labastida, who has been chief executive of Aeroméxico since 2005, also holds a Ph.D. in economics from the Massachusetts Institute of Technology.

The company is going public during a relatively strong period for airline stocks.

The U.S. Global Jets ETF JETS is up 10.1% in 2024, compared to a 9.5% gain by the S&P 500 SPX.

Also read: Delta wins highest praise as HSBC launches U.S. airline coverage

Aluminum recycler and producer Novelis files IPO

Novelis Inc., an Atlanta-based aluminum producer and recycling company, late Monday filed its IPO with 11 underwriters led by Morgan Stanley, BofA Securities and Citigroup.

The company is indirectly owned by India's Hidalco Industries Ltd. (IN:500440) through Hindalco's AV Minerals unit.

It plans to trade on the New York Stock Exchange under the symbol NVL.

Novelis rang up $600 million in net income on revenue of $16.2 billion in fiscal 2024, compared to net income of $658 million and revenue of $18.49 billion in 2023. Novelis has 13,190 employees.

The company has yet to set an estimated price range or number of shares in the IPO.

Kumar Mangalam Birla is chairman of Novelis. He is also chairman of Hindalco Industries, a producer of copper and aluminum.

Games Global Ltd. scraps IPO

Games Global Ltd. said it decided to withdraw its IPO due to market conditions, according to a filing late Monday.

Games Global, which makes software for gambling games, had planned to go public this week.

Games Global had planned to offer 14.5 million shares at an estimated price range of $16 to $19 for trading on the New York Stock Exchange under the symbol GGL.

At the midpoint of the estimated price range, Games Global would have raised about $254 million, with a market capitalization of about $2 billion.

-Steve Gelsi

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05-14-24 1524ET

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