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Indigo Partners buys stake in Mexico's Volaris

US investment firm Indigo Partners has emerged as one of several new owners of Mexico's Volaris after two of the carrier's four founding partners elected to sell their shares.

Volaris announced on 16 July that Inbursa and Televisa have sold their combined 50% shareholding to a group of investors that include Indigo, Maria Cristina Kriete Avila, Emilio Diez Barroso Azcárraga, Pedro Aspe Armella, Ignacio Guerra and the investment fund Discovery Americas II. Volaris says other unidentified Mexican citizens were also involved in the transaction.

Indigo, headed by ex-America West chief Bille Franke, has been an active investor in the low-cost carrier sector. Indigo currently holds or previously held stakes in Spirit Airlines, Hungary's Wizz Air, Singapore's Tiger Air, Russia's Avianova and Indonesia's Mandala Airlines.

A Volaris spokeswoman says the carrier is not revealing what size stake each owner now holds in the privately held company. But she says the transaction has been structured to ensure Volaris remains at least 75% owned by Mexican citizens, "according to what the Mexican Foreign Investment Law states".

Inbursa and Televisa are Mexican companies but Robert Kriete, one of Volaris' other two founding partners and a key shareholder in Avianca-TACA, is an El Salvadorian citizen. However, Kriete's sister, Maria Cristina Kriete Avila, is a Mexican citizen.

The fourth founding partner, Pedro Aspe, is a Mexican citizen. But Aspe's original 25% stake was through his US-based investment fund Discover Americas. Volaris in its announcement lists Discovery Americas II as a Mexican private equity fund.

Volaris has been working on a new ownership structure since Inbursa and Televisa opted to accept a takeover offer from rival low-cost carrier Interjet earlier this year. Aspe and Kriete opted to reject the takeover offer and instead exercise their option to acquire the shares held by their two partners. But instead of increasing their stakes, which would have resulted in non-compliance with Mexican legislation which caps foreign ownership, Aspe and Kriete started to work on brining in new investors to replace Inbursa and Televisa.

The new ownership structure ensures Volaris' independence and, according to the airline, "uninterrupted growth". Volaris says there will be no changes to its management team or its strategy.

Volaris has not revealed any financial details regarding the transaction. But a Televisa source tells ATI that its 25% shareholding has been sold for $80.6 million. Televisa originally invested $49.5 millions in Volaris, which started operations in 2006.

Volaris has since grown to become Mexico's third largest airline. It currently operates 21 Airbus A320 family aircraft on domestic and transborder routes. Volaris currently only serves three US cities but it is planning to aggressively expand its US network over the next few years in partnership with Southwest Airlines.

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