Aeroméxico shareholders have the chance to sell out after an undisclosed buyer made an offer to buy 49% of the existing capital stock at the less than stellar price of 0.01 peso per share. The low-ball offer saw Aeroméxico shares crash this week.

Discounted buy offer sees Aeroméxico shares dive

The low-ball offer came as Aeroméxico negotiates to exit from Chapter 11 bankruptcy protection. That exit process includes raising some much-needed capital. One of the ways Aeroméxico wants to do this is to sell more shares. But this would have the effect of diluting the value of existing stock holdings.

The unnamed stock buyer is initiating the proceedings before the National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores) and the Mexican Securities Exchange (Bolsa Mexicana de Valores) and is prepared to buy over 330 million shares from long-suffering Aeromexico stockholders.

But before you think of this as a white knight offer - the proposed buy price of 0.01 peso per share was significantly below Wednesday's publicly traded price of 3.89 pesos per share. As a Reuters report notes, the offer sent the Aeroméxico stock price south. By Thursday afternoon (Mexico City time), Aeroméxico shares traded at less than 1.80 pesos per share.

Those 330 million shares make up just under half of Aeroméxico's capital stock before any dilution. Issuing more shares sees more supply hit the market, which would normally see the value of existing shares fall.

Aeroméxico eyes US$720 million of new capital

Aeroméxico shares have declined since February 2017 when they hit five-year peaks of around 46 pesos per share. The undisclosed buyer's offer of 0.01 pesos per share values the Aeromexico stock at around 0.02% of its February 2017 price. Aeroméxico says the buyer is not connected with the airline.

Under the restructuring plan (still subject to several conditions and court approval), Aeroméxico will, directly or indirectly, raise approximately US$720 million of new capital and $762.5 million of new debt. In addition,  Aeroméxico will equitize a large portion of existing recognized debt.

After the planned Aeroméxico restructuring, those 330 million-odd shares will represent less than 0.01% of the total future new shares making up Aeroméxico's capital stock. Aeroméxico's board acknowledges the dilution is "extraordinary."

This might seem tough, but existing shareholders often see their stock holdings wiped out when a company restructures under a formal bankruptcy process. It also goes some way to explaining the 0.01 pesos per share buy offer from the mystery buyer.

Delta's millions go up in smoke

Atlanta-based Delta Air Lines is one of Aeroméxico's highest-profile stockholders. They've long had a stake in Aeroméxico, including buying 32% of Aeroméxico's capital stock in 2016 for a lazy US$620 million (that deal valued each Aeroméxico share at 53 pesos). Delta is now holding over 51% of Aeroméxico's capital stock ahead of the restructuring process.

Aeroméxico says Delta remains committed to supporting the airline through the restructuring process. Delta will not participate in the 0.01 peso per share offer. However, Delta's stake in Aeroméxico will drop to around 20% after the restructuring, and Delta will no longer be Aeroméxico's biggest stockholder when the airline exits bankruptcy protection.

Earlier this week, Delta Air Lines publicly called out its relationship with Aeroméxico. Delta acknowledged its reduced equity stake. But Delta also praised the strong transborder network the two airlines have built up and committed to stay the course.