UPDATE 3-Mexican group buys stake in troubled airline

* Mexican group buys 95 pct of Mexicana’s holding company

* Advent International structured deal, not taking stake

* Pilots union says amount of capital injection pending
(Adds detail on new chief executive)

By Michael O’Boyle and Veronica Gomez Sparrowe

MEXICO CITY, Aug 21 (BestGrowthStock) – A Mexican consortium, aided
by private equity firm Advent International, has stepped up to
buy a controlling stake in troubled airline Mexicana after
financial woes pushed the carrier to the brink of collapse.

Advent helped put the deal together, but the equity firm is
not participating as a shareholder in the consortium, called
Tenedora K, according to a statement obtained from Advent’s
public relations office in Mexico on Saturday.

Mexicana, one of Mexico’s two top airlines and a major
carrier bringing tourists to famed Mexican beach resorts, has
halted more than a dozen international routes and stopped
selling tickets after requesting creditor protection in Mexico
and the United States.

Tenedora K bought the 95 percent stake in Nuevo Grupo
Aeronautico, which controls Mexicana as well as domestic
airlines Mexicana Click and Mexicana Link, the statement said.

“Tenedora K is a company formed by a group of Mexican
businessmen as a vehicle to capitalize the mentioned airlines,
with the aim of rescuing them from the critical financial and
operating situation they are in,” the statement said.

The news that the Mexican group had stepped forward caps a
week marked by speculation about how long a carrier with about
$800 million in debt could continue to operate.

Tenedora K said the move was only a “first step” in trying
to save the airline, adding that legal proceedings under
Mexico’s insolvency laws would continue for the time being.

The statement obtained from Advent said that among the
Tenedora K shareholders were Grupo Industrial Omega and Grupo
Arizan. The remaining 5 percent stake in the holding company is
held by the pilots union, it said.

On Friday, Mexican hotel operator Grupo Posadas
(POSADASL.MX: ) said it had sold its 30 percent share of Nuevo
Grupo Aeronautico to an unspecified buyer for a “symbolic”
price. Posadas bought Mexicana in 2005 and later sold off
stakes to private investors.

MEXICANA SAYS LABOR COSTS TOO HIGH

Fernando Perfecto, head of the pilots’ union, said the
consortium was still deciding how much money it would invest in
the airline.

He said it would be more clear by Wednesday of next week
how much money Tenedora K would inject into the troubled
airline. For now, he said, Mexicana had enough cash to keep the
100 daily flights it is currently operating in the air.

Mexicana Chief Executive Manuel Borja recently said the
airline would need at least $100 million to continue
operations.

Perfecto, who has been involved in seeking a buyer, said
Borja had stepped down and had been replaced by a new executive
as of Friday. He declined to name the new head of the airline.

“We are working to fast track due diligence, and the
capital injection is subject to there being favorable
investment conditions,” Perfecto said.

Mexicana’s management had said that current labor costs are
too high and will ensure the airline cannot continue to
operate. While unions oppose pay cuts, they have expressed
willingness to discuss pay and staff cuts.

“Tenedora K stresses that this is the first step to
establish conditions that could eventually allow for a
restructuring process to begin, which would require agreements
on labor, operation and financial issues. Without these it will
not be possible to rescue the airlines,” the statement said.
(Editing by Missy Ryan and Jackie Frank)

UPDATE 3-Mexican group buys stake in troubled airline