Mexican Business Consortium Tries To Rescue Mexicana Airlines

Mexicana airlines may have found a way out of its financial chaos. A group of Mexican investors has bought a controlling stake in the debt-ridden carrier.

The group, Tenedora K, says it has acquired a 95 percent stake in the holding company of Mexico's largest airline, and that the pilots' union will hold the remaining 5 percent of the shares.

The deal was put together and announced by U.S. private equity firm Advent International, which is not investing.

The new owners says in a statement released by Advent, their goal for the carrier is "rescuing them from the critical financial and operating situation they are in." They say the acquisition is only a "first step."

Earlier this month, Mexicana filed for bankruptcy protection in Mexico and the U.S. with executives saying the carrier owes banks more than $199 million, though not disclosing the total debt.

Since that time the carrier has stopped selling tickets and suspended some flights.

The carrier blamed adverse affects from the outbreak of swine flu last year as one of the reasons for its financial woes.

Photo, abdallah, flickr
Read Full Story