A Mexican judge on Friday ruled in favor of a proposal that would remove Mexicana's maintenance arm, Mexicana MRO Services, from the beleaguered Mexican airline group's bankruptcy proceedings, authorities said.
"This decision is a key step on the road to removing MRO from the process it's currently in," its four main creditors said in a statement presented by the Communications and Transportation Secretariat.
Those four creditors, who hold 92 percent of MRO's debt, proposed on Oct. 31 that the subsidiary company be taken out of the process, continue to operate and a trust be created for the benefit of retirees and workers of the Mexicana group of companies currently under bankruptcy protection.
Two Mexican banks, Banorte and Bancomext; airport group Grupo Aeroportuario del Pacifico, through the Guadalajara Airport; and Mexico City's Benito Juarez International Airport submitted the proposal to Judge Edith Alarcon, who issued the ruling Friday.
The creditors said in a statement that they were pleased with the ruling by Alarcon, who is in charge of Mexicana's bankruptcy proceedings, saying she had instructed Mexicana's conciliator, Gerardo Badin, to formalize a creditors' agreement based on their proposal.
Those four companies agreed to convert their debt into equity and take control of MRO, in what could be a step prior to the liquidation of the assets of Mexicana de Aviacion airline - once Mexico's leading carrier - and sister budget airlines Click and Link.
The creditors said the debt-for-equity swap would directly benefit not only MRO's 1,200 workers, but "some 8,500 retirees and former workers of the (Mexicana group of airlines) currently in bankruptcy proceedings."
Mexicana de Aviacion, Click and Link grounded their operations in August 2010 and filed for bankruptcy protection shortly thereafter to restructure a debt load of more than $800 million.
Over the past three years, authorities have sought to reach a settlement with the airline group's employees and mulled the sale of its assets, including the maintenance subsidiary. EFE