Interjet becomes second Mexican carrier to seek public listing

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Interjet's parent company ABC Aerolineas has become the second Mexican company to file for public listing since the beginning of this year.

The company applied for an initial public offering and plans to list ordinary shares on Bolsa Mexicana de Valores (BVM), the Mexican Stock Exchange.

The Mexican low-cost carrier plans to carry out a mixed stock offering, a primary (series A) and secondary (series B) offering in Mexico and a simultaneous private offering in the USA and other countries.

No information was disclosed on the number of shares but the company was talking with potential underwriters in the spring to sell a stake of at least 15%, the minimum required by the stock exchange for a new listing. At the time Interjet said it could sell a stake of as much as 20% for about $200 million, valuing the carrier at $1.2 billion.

According to the filings, Don Miguel Aleman Velasco owns 30.14% of ABC Aerolineas while Don Miguel Aleman Magnani owns 24.85% and Don Francisco Javier Mondragon Alarcon has a 5.01% stake. The remaining 40% stake belongs to Galem SA, ABC Aerolineas's parent company.

JPMorgan Chase is the underwriter of the Interjet's offering.

The IPO would be the second this year for a Mexican airline. Grupo Aeromexico raised around $330 million in an initial public offering for 17.67% of its capital in April. The airline sold 125.5 million shares at 31 pesos each, the lower end of the forecast range of 30 to 34 pesos. Aeromexico's CFO Ricardo Sanchez Baker said the company plans to use the funds to boost its cash position to about 15% of the revenues and finance the acquisition of 10 Embraer 190s and 10 Boeing 737s.

Last month Spirit Airlines raised $187.2 million through its IPO, 42% less than it originally sought, after the U.S. discount carrier cut the price and number of shares in its initial public offering. The US-low cost carrier sold 15.6 million shares at $12 each. Private equity firm Indigo Partners bought a majority stake in Spirit in 2006, and also invests in Mexico's Volaris.

According to the filing, Interjet's cash position dropped by $21.8 million to $9.16 million during the nine-month's period to 30 September 2010. The carrier had $985,000 bank deposits and $8.17 million cash and cash equivalents.

Interjet said it operates a fleet of 24 aircraft and has a domestic passenger market share of around 24%. It aims to grow its fleet to 55 aircraft in five years. It placed a firm order for 15 SuperJet 100s in January this year.

The six-year old airline plans to use the proceeds from the primary offering to improve its financial position, finance the acquisition of aircraft, and expand its maintenance area at the Toluca airport.