Grupo Aeroméxico Public Tender Offer

Grupo Aeroméxico, S.A.B. de C.V. ("Aeroméxico" or the "Company") (BMV: AEROMEX) informs that, following the approval on December 10^th by the United States Bankruptcy Court for the Southern District of New York (the "Court") of the (i) Disclosure Statement regarding the Joint Plan of Reorganization of Aeroméxico and its subsidiaries that are debtors under the Company's Chapter 11 restructuring proceeding (the "Plan"), and (ii) solicitation voting process on the Plan, it has been informed in connection with the agreements reached with certain creditors under its DIP Financing:

A company, not related to Aeroméxico, will initiate the proceedings before the National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores) and the Mexican Securities Exchange (Bolsa Mexicana de Valores) to make a voluntary tender offer pursuant to Article 97 and other applicable provisions set forth in the Mexican Securities Law (Ley del Mercado de Valores) (the "Offering") to give the existing shareholders the option to withdraw from the current capital stock prior to the imminent capitalization of several debt of Aeroméxico and its subsidiaries and new contributions into the capital stock, which will substantially dilute the current shares upon emerging from its Chapter 11 restructuring proceeding once the Plan is approved by the Court and becomes effective.
The Offering will be launched prior to Aeroméxico's general shareholders meeting, pending to be called, at which it is expected that several corporate actions required to implement and effectuate the Plan will be approved, which will include, among other resolutions to be submitted to the approval of the shareholders, a capital increase and the equitization of debt and new capital contributions (the "Shareholders' Meeting").
The Offering will be made at 1 Mexican cent for each Mexican peso, for each of Aeroméxico's outstanding shares. Delta Airlines, Inc. ("Delta") who informed that will not participate in the Offering, and thus, a maximum of 331,480,713 shares are expected to be acquired, which would represent, if applicable, up to 49% of the capital stock prior to the dilution effects to be derived from the implementations of the Plan. Said chares jointly represent, at the end of the Offer and once the Plan becomes effective, less than 0.01% of the total future new shares representing the capital stock of the Company, given the dilution to be derived from the capitalization of debt and new capital stock contributions and eventual subscription by other shareholders and investors.
The Offering would be consummated after the Shareholders Meeting takes place (provided that the resolutions to be adopted at the Shareholders Meeting, as the case may be, will take full legal effect until the effective date of the Plan, that is, after the Offer is consummated). Shareholders holding future new shares representing the capital stock of Aeroméxico, once the Plan becomes effective and the consequent dilution of the Company's existing capital stock occurs, have assurance of their expected new shareholding participation under the terms of the Plan. Within the new shareholders will be the group of strategic Mexican shareholders with a 4.10%, Apollo with 22.38%, Delta Airlines with 20.00%, and the remaining shares distributed among all new investors and creditors that capitalize their recognized claims in shares representing Aeroméxico's future capital stock.

The Offer will be sponsored with funds of the bidder, coordinated with Aeroméxico, and subject to a schedule that allows Aeroméxico's existing shareholders to have an opportunity to sell their shares through the securities market before the effectiveness of the Plan and of the resolutions to be adopted by the Shareholders Meeting regarding the capital increase and capitalization of debt and new capital contributions contemplated under the Plan, which imply, as indicated, a substantial dilution for existing shareholders.

Brief antecedents

Orderly financial restructuring

As we have been reporting to the market, in June, 2020, we filed before the Court a voluntary financial restructuring process under Chapter 11 of the U.S. Bankruptcy Code. Said process has been carried out in an orderly manner, while continuing to operate as an ongoing business to strengthen our financial position and liquidity, protect and preserve our operations and assets, and implement the necessary operational adjustments to address the impact of COVID-19.

DIP financing and conversion option

As part of our financial restructuring process, as disclosed to the market since August 13, 2020, and subsequently updated through other disclosures, with prior Court approval we entered into a DIP Financing in the aggregate principal amount of US$1 billion with funds managed by affiliates of Apollo Global Management Inc. ("Apollo"). The DIP Financing was comprised of: (i) a US$200 million senior secured Tranche 1; and (ii) a US$800 million senior secured Tranche 2. We disposed both tranches in full by the end of February of this year, as duly informed to the market.

Tranche 2 of the DIP Financing provided an option for each tranche creditor to convert its debt into new shares of Aeroméxico's capital stock. As is common in this type of financing, as of this date, Apollo is not the only creditor under the DIP Financing and there are several creditors, holders of collection rights derived from the Tranche 2 financing, that opted to convert all or part of their claims into new shares of Aeroméxico, subject to the approval and effectiveness of the Plan.

Request from our Board of Directors

Since February of this year, our Board of Directors approved that, in the event of the capital increase and the capitalization of debt derived from the DIP Financing, a public tender offer should be carried out in order to provide all of our existing shareholders with a put in the market, prior to the imminent and extraordinary dilution that the shares shall suffer from the capital increase and capitalization of debt derived from the Plan.

The foregoing, derived from the fact that, as disclosed to the market since February 19, 2021, it was anticipated that: "... if the lenders exercise the option to convert the Tranche 2 DIP Facility, following the corresponding capital increase, the shareholders will be almost fully diluted so that their remaining equity stake will likely be minimal (if any)… "

Restructuring Plan

As a part of our restructuring process, we have been working for months with the key stakeholders process to finalize the Plan and related documents. These have been submitted for approval of the Court, as we have been timely informing the market through multiple relevant events, regardless of the accessibility and publicity of all key documents and milestones relating to our Chapter 11 restructuring process. Aeroméxico will continue working with all of its key stakeholders to obtain Court approval of the Plan and emerge from Chapter 11 as expeditiously as possible. The Plan and the other documents are public since December 10, 2021 and that are filed before the Court, as communicated in the corresponding relevant event on that same date. The referred Plan, and documents under it, establish the obligation to cause the Offer to be made.

Capital and debt issuance

Under the Plan, subject to several conditions, Aeroméxico will, directly or indirectly, raise approximately $720 million of new capital and $762.5 million of new debt, in addition to the equitization of a large portion of our recognized debt under the Plan, submitted for Court approval, which would put us in a position of financial strength and liquidity that we believe will allow us to emerge from our financial restructuring process in the best possible condition and focus on our consolidation and future growth, for the benefit of all Aeroméxico's stakeholders, particularly our workforce, as well as our loyal customers.

Capital commitments

Under the Plan and related documents, we have capital commitments from creditors and investors that include creditors of the DIP Financing; new investors; Delta, our strategic partner; and a strong group of long-term shareholders who have been and investors, who have been at the forefront of our group of shareholders for many years with us proactively throughout the restructuring process, including Eduardo Tricio Haro, Valentín Diez Morodo, Antonio Cosío Pando and Jorge Esteve Recolons.

Both Delta and the Mexican shareholders, in addition to injecting resources into the Company, have committed to support us with their valuable strategic participation. Among others, the Mexican shareholders, who also serve on our board of directors, and will hold shares representing more than 1% but less than 10% of Aeroméxico's outstanding shares, have committed to remain, not to compete, align, and focus their interests and efforts in Aeroméxico.

As we had anticipated, considering the upcoming capital increase to be resolved at the Shareholders Meeting the current Delta shares and the other shareholders who are not expected to exercise their preemptive rights will be fully practically in its entirety. It is expected that, upon consummation of the capital increase and the equitization of debt and new capital contributions under the Plan, our strategic partner, Delta, will hold approximately 20% of Aeroméxico's capital stock.

That is, once the Plan and the resolutions of the Shareholders Meeting becomes fully effective, existing shareholders will be almost completely diluted, so that their remaining shareholding is likely to be minimal (if any) and the value expectations with respect to their current shareholding positions may be close to zero.

Other actions to implement the Plan

In addition to the capital increase and the commitment to cause the Offering subject matter of this release to be carried out, the Plan contains several actions to be implemented, that will be proposed shortly for the approval of the Shareholders Meeting, including, among others, amending certain provisions of our by-laws and appointing and/or ratifying members of the Board of Directors. In due course, we will provide our shareholders with more information regarding said actions to provide them with additional information for decision-making at the Shareholders Meeting.