Mexicana Airlines Near Debt-For-Equity Swap to Pay Down Debt, Lawyer Says

It may have been three years since Mexicana de Aviacion went bankrupt but its 8,500 disgruntled workers are still hoping the airline will fly again.

And so seems the government. On Nov. 7, the airline’s owner Nuevo Grupo Aeronautico (NGA) struck a deal with a group of creditors including state-owned airports and leading bank Banorte to potentially swap as much as $2.5 billion of debt for NGA shares.

As part of the deal, the largely unnamed creditors and the government will create a $190 million fund to pay the airlines’ workers and recapitalize MRO, Mexicana’s aircraft maintenance division.

The deal ...