Mexico

The main unit of Mexicana said Wednesday that it had resumed ticket sales as it faces a showdown next week with creditors seeking to retrieve their aircraft from the Mexican airline, Dow Jones Daily Bankruptcy Review reported. A senior executive said Compania Mexicana de Aviacion restarted sales online and through ticket offices. Adolfo Crespo, senior vice president of customer service and corporate communications, said it would resume indirect sales through travel agencies, initially via those connected to the Amadeus booking system.

Debt-ridden airline Mexicana de Aviacion needs a cash injection of at least $100 million to keep flying, the company's chief executive said on Tuesday, Reuters reported. "What we are looking for is between $100 million and $150 million," Chief Executive Manuel Borja said in an interview with Radio Formula. Time is ticking for troubled Mexicana, which has ceased flying more than a dozen international routes and stopped selling tickets after requesting creditor protection last week under Mexico's insolvency law, or concurso mercantil. The company has yet to be declared bankrupt.

The main unit of Mexicana on Monday said that it was cutting flights "to a minimum" amid falling sales and cash reserves following last week's bankruptcy filing, Dow Jones reported. Compania Mexicana de Aviacion also said its problems had spread to regional and low-cost units, MexicanaClick and MexicanaLink, which did not file for creditor protection but are suffering "serious repercussions" on sales. Mexicana said it was suspending flights starting Monday to 13 destinations, including long-haul services from Mexico City to Madrid, London, Buenos Aires and Sao Paulo.

Companies that leased planes and equipment to Compania Mexicana de Aviacion are asking a U.S. bankruptcy judge to lift a restraining order barring them from taking their property back from Mexico's largest airline, Dow Jones Daily Bankruptcy Review reported. Lawyers for Wells Fargo & Co. and two other Mexicana creditors said in a court filing that they have the contractual right under New York law to immediately take the planes and equipment back. Once the airline terminated the leases, the creditors say, Mexicana forfeited its rights under the lease terms. Judge Martin Glenn of the U.S.

Mexican bank Banorte said it has only limited exposure to the financial woes of Mexicana de Aviacion, the Mexican airline that filed for credit protection in Mexico and the United States this week, Reuters reported. The bank said in a statement on Wednesday that it was not a direct creditor of the struggling airline but was owed money by Mexicana's holding company. The bank said the group's credit commitments to Banorte totaled 1.576 billion pesos ($125 million) and would expire in 2014.

Debt-ridden Mexicana de Aviacion, which filed for creditor protection in Mexico and the United States this week, suspended ticket sales on Wednesday as its operating troubles deepened. Company spokesman Adolfo Crespo told Radio Formula that the airline will continue operating flights that have been already sold. A spokesman for the pilots' union told Reuters that they were expected to meet with Mexico's labor minister on Thursday in a bid to strike a deal with the company's management. The flight attendants union was not immediately available for comment.

The main unit of Mexicana on Tuesday warned it could face liquidation unless Mexico's largest airline was allowed to keep operating aircraft in the wake of its bankruptcy filing, Dow Jones reported. Compania Mexicana de Aviacion filed for bankruptcy protection in the U.S. and Mexico on Monday after failing to reach a new deal with its unions to cut costs after a period of rapid expansion. The airline continued to operate most flights Tuesday, but said in court filings that aircraft leasing companies and owners were taking steps to repossess planes.

Grupo Mexicana de Aviacion, Mexico’s biggest airline by passengers, is in talks with international investors as it considers whether its largest unit should file for bankruptcy, Chief Executive Officer Manuel Borja Chico said. Compania Mexicana de Aviacion, which is separate from the company’s low-cost Click and Link units, seeks a new labor agreement with unions to cut costs, Borja told reporters today in Mexico City. The company must improve operations before it can attract new investment, he said.

Canadian authorities canceled two Mexico City-bound flights from airline Mexicana de Aviacion on Thursday amid mounting concerns over the financial health of the company, Reuters reported. The flights, set to depart from Montreal and Calgary, were canceled due to a request to Canadian authorities from an unnamed creditor seeking clarification on Mexicana's debt situation, the airline said in a release.

Mexico's third-largest retail chain, Comercial Mexicana, aims to resume modest expansion next year with a handful of new stores once it completes its $1.54 billion pre-packaged debt-restructuring agreement, Dow Jones Daily Bankruptcy Review reported. Growth at Comercial Mexicana, which runs 231 stores and 73 restaurants, has been virtually on hold since October 2008 when blowout losses on foreign exchange derivatives - wrong-way bets on the Mexican peso - led to a debt default and the restructuring process, which is expected to be concluded within months.