Mexicana eyes court protection from creditors-paper

MEXICO CITY, July 21 (BestGrowthStock) – Mexicana de Aviacion, one
of Mexico’s two dominant airlines, could seek protection from
creditors later this year amid a downturn in the industry, a
local newspaper said on Wednesday.

Alberto Aguilar, a columnist for El Universal, quoted an
unnamed source as saying the privately held airline was
exploring filing for concurso mercantil, which allows companies
to restructure debt using Mexico’s insolvency law, by the end
of year.

Mexicana representatives were not immediately available to
comment.

Several major Mexican companies have faced tough debt
problems since the global credit crisis and subsequent
recession in Mexico.

Supermarket operator Comercial Mexicana (COMEUBC.MX: ) last
week submitted a prepackaged debt restructuring, becoming the
first listed company to use 2007 reforms to Mexico’s insolvency
law [ID:nN15248864] that allow companies with pre-negotiated
creditor deals to enter and exit courts in just a few months.

Mexicana, controlled by Grupo Mexicana, had sought to place
a $250 million bond earlier this year, but global volatility
due to Europe’s debt troubles throttled demand in Latin
American corporate debt markets.

Mexico’s air industry was battered by the country’s deep
economic recession in 2009 and the H1N1 flu outbreak that hit
tourism hard.

Mexicana said in May it hoped to return to profitability
this year after two years of losses and forecast at the start
of 2010 that it would carry 12 million passengers, up 8 percent
from the previous year.

Local hotel company Grupo Posadas (POSADASL.MX: ) has a 30
percent stake in Mexicana.

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(Reporting by Michael O’Boyle; Editing by Lisa Von Ahn)

Mexicana eyes court protection from creditors-paper