- Definitive agreement reached ensuring strong alignment of interest between the PLM joint venture partners
- 20-year extension of current CPSA term to 2050 between Aeromexico and PLM
- Provides US$100 million in financial support for Aeromexico funded by PLM's cash
- Aeromexico granted a 7-year option to purchase Aimia's 48.9% stake in PLM with minimum price of US$400 million
- Parties agree to pursue initiatives to provide additional dividends to shareholders
- The Aeromexico customer is at the center of the agreement with more relevant benefits and program expansion plans
MEXICO CITY, June 29, 2020 /PRNewswire/ -- Grupo Aeromexico S.A.B. de C.V. ("Aeromexico") (BMV: AEROMEX) is pleased to announce it has signed a definitive agreement with Aimia Inc. (TSX: AIM), an investment holding company reflecting the parties' previously announced agreement to make certain changes to the Shareholders Agreement between them and the commercial agreement (CPSA) between Aeromexico and PLM Premier, S.A.P.I. (PLM), the operator of the Club Premier loyalty program.
The changes made to the CPSA include a 20-year extension of the current term to September 13, 2050. The multi-year commercial contract extension strengthens the relationship between Aeromexico and PLM, to grow and improve the program, and align PLM shareholder interests regarding PLM profitability and value.
Following the initial US$50 million loan to Aeromexico by PLM made under the existing intercompany loan facility upon the signing of the letter of intent between Aimia and Aeromexico announced on May 12, 2020, an additional $50 million advance to Aeromexico by PLM through pre-purchases of award tickets was provided with the execution of the amendments to the CPSA. This financial support totals US$100 million and is secured by Aeromexico's stake in PLM. Subject to market conditions, Aimia and Aeromexico will explore alternatives to leverage PLM's debt-free balance sheet and strong cash flows to provide additional resources to shareholders, including a potential leveraged recapitalization of PLM's balance sheet.
Aeromexico and Aimia have also agreed to modify the Shareholders Agreement to grant Aeromexico a 7 year option to purchase Aimia's 48.9% equity interest in PLM at a minimum floor of US$400 million or at an Adjusted EBITDA multiple of 7.5x, whichever is greater, plus Aimia's pro-rata share of cash and net of third party financial debt.
Aimia Inc. CEO Phil Mittleman, commented: "I am excited to announce the signing of the definitive agreement with Aeromexico which was made possible as a result of our strengthened and collaborative partnership. We are very pleased to be in a position to utilize the robust cash flow and financial attributes of PLM to support our airline partner during this challenging time. Looking ahead, we believe PLM will serve an instrumental role in assisting Aeromexico to incentivize their best revenue-producing customers to continue flying with them as well as provide a competitive differentiation to attract and acquire new customers."
Aeromexico's CEO, Andres Conesa, concurred by noting. "The terms of the agreement are beneficial to both parties. But the customer is at the center of the expanded relationship. Customers will benefit from a more relevant and agile program that represents the best option to reward loyalty both on the ground and in the air in Mexico and around the world across all destination Aeromexico serves. We are looking forward to implementing the newly agreed terms to drive additional customer loyalty and benefit both companies."
This press release contains certain forward-looking statements that reflect the current views and/or expectations of the Company and its management with respect to its performance, business and future events. We use words such as "believe," "anticipate," "plan," "expect,", "intend," "target," "estimate," "project," "predict," "forecast," "guideline," "should" and other similar expressions to identify forward-looking statements, but they are not the only way we identify such statements. Such statements are subject to a number of risks, uncertainties and assumptions. We caution you that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in this release. Grupo Aeroméxico is under no obligation and expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About Grupo Aeromexico
Grupo Aeromexico, S.A.B. de C.V. is a holding company whose subsidiaries are engaged in commercial aviation in Mexico and the promotion of passenger loyalty programs. Aeromexico, Mexico´s global airline, operates more than 570 daily flights and its main hub is in Terminal 2 at the Mexico City International Airport. Its destinations network features more than 80 cities on three continents, including 42 destinations in Mexico, 17 in the United States, 15 in Latin America, 4 in Canada, 5 in Europe and 2 in Asia. The Group's operating fleet of 119 aircraft is comprised of Boeing 787 and 737 jet airliners and next generation Embraer 170 and 190 models. In 2012, the airline announced the most significant investment strategy in aviation history in Mexico, to purchase up to 100 Boeing aircraft including 90 MAX B737 jet airliners and 10 B787-9 Dreamliner's. As a founding member of the SkyTeam airline alliance, Aeromexico offers customers more than 1,000 destinations in more than 170 countries served by the 19 SkyTeam airline partners rewarding passengers with benefits including access to 790 premium airport lounges around the world. Aeromexico also offers travel on its codeshare partner flights with Delta Air Lines, Air France-KLM, Avianca, Copa Airlines and WestJet, with extensive connectivity in countries like the United States, Brazil, Canada, Colombia and Peru.
SOURCE Grupo Aeromexico S.A.B. de C.V.