The U.S. government is preparing to downgrade Mexico's aviation safety rating, a move that would bar Mexican carriers from adding new U.S. flights and limit airlines' ability to carry out marketing agreements, Reuters reported. The Federal Aviation Administration's (FAA) planned move is expected be announced in the coming days and follows a lengthy review of Mexico's aviation oversight by the agency. One airline industry source said the FAA's concerns did not involve flight safety issues but rather Mexico's oversight of air carriers.
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Mexico
A wave of accounting revisions is hitting two of Mexico’s largest nonbank payroll lenders and the international bond investors who lent them billions of dollars in recent years, the Wall Street Journal reported. Privately held AlphaCredit Capital SA de CV and publicly listed Credito Real SA CREAL -2.60% B de CV disclosed unexpected losses in recent weeks, and AlphaCredit also said financial statements from 2018 to 2020 could no longer be relied upon. Credito Real incorporated a relatively large loan it had made to a small business into its past-due loan book.
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The Biden administration announced yesterday that it was asking Mexico to review whether labor violations had occurred at a General Motors facility in the country, a significant step using a new labor enforcement tool in the revised North American trade deal, the New York Times reported. The administration is seeking the review under the novel “rapid response” mechanism in the United States-Mexico-Canada Agreement, which replaced the North American Free Trade Agreement and took effect last summer.
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The new management of Mexican airline Interjet has hired a restructuring firm to help overcome its $1.25 billion of inherited debt as the company looks to restart operations, Bloomberg News reported. The airline, now controlled by businessman Alejandro del Valle, has brought on Mexico City-based Argoss Partners to help resolve issues with creditors via a prepackaged bankruptcy and obtain debtor-in-possession financing. Interjet plans to submit a restructuring plan to Mexico’s bankruptcy regulator for review in the coming weeks.
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A U.S. bankruptcy court will allow Grupo Aeromexico, which operates Mexico's largest airline, to increase the size of its fleet of planes, the company said on Friday, Reuters reported. Last week, Aeromexico agreed to purchase two dozen Boeing planes as part of a deal that should yield an estimated $2 billion in savings due to better conditions in some long-term maintenance for its existing fleet and leasing contracts.
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Interjet shareholders unanimously voted to approve a filing for bankruptcy protection, a move that would enable the Mexican airline to resume payments to employees that have been frozen for several months, Bloomberg reported. Alejandro del Valle, who took a 90% stake in the carrier late last year, led discussions over the filing with former majority owners and founders Miguel Aleman Magnani and his father, Miguel Aleman Velasco. Interjet is the second Mexican airline to file for bankruptcy protection since the start of the coronavirus pandemic last year.
Canadian National Railway on Tuesday offered to buy Kansas City Southern for $33.7 billion, topping a $29 billion bid put forward last month by a rival railroad operator, Canadian Pacific, the New York Times reported. The competing offers underline the riches expected to come from trade flows after the United States-Mexico-Canada Agreement was passed into law last year. A merger with either suitor would create a railroad line that stretches from Canada to Mexico.
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Grupo Televisa SAB is in talks to join forces with Univision Communications Inc., according to people familiar with the matter, a deal that could more formally unite the Spanish-language media giants after a long partnership, Bloomberg News reported. With discussions at an early stage, no final decision has been made and talks could fall through. The two sides are still discussing the structure of a potential transaction and which parts of the businesses could merge.
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U.S. private equity firm Blackstone in 2016 unplugged a Texas power plant that it owned from the state’s grid in a bet that it could make a fortune as the only American-based generator selling electricity exclusively to Mexico. That bet has gone south, Reuters reported. Nearly five years later, Blackstone’s gas-fired plant, Frontera Holdings LLC, is struggling to exit bankruptcy after burning investors holding nearly $1 billion of its debt - the victim of a succession of problems ranging from a power market collapse in Mexico in 2020 to last month’s severe cold snap.
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