Bloomberg News

Mexico’s Interjet May Make Second, Smaller IPO Attempt This Year

July 08, 2011

July 8 (Bloomberg) -- ABC Aerolineas SA, the operator of low-cost Mexican airline Interjet, which canceled an initial public offering last month, may try to sell shares again this year, Chairman Miguel Aleman Magnani said.

Interjet may reduce the amount it seeks to raise from the original target of about $300 million and focus more on domestic investors, Aleman Magnani said in an interview in his Mexico City office yesterday.

A new share sale “could be this year,” Aleman Magnani said. “We’re going to try, we’ll see how the markets are. ”

Interjet scrapped plans for an IPO on June 29, citing a “complex situation” in global financial markets. Some potential investors in the airline chose not to buy shares after suffering losses in the days leading up to the planned IPO, Aleman said.

The airline had aimed to sell shares at 21 pesos to 25 pesos each, with 70 percent sold abroad and 30 percent in Mexico, according to data published on the Mexican stock exchange’s website.

Aleman Magnani said that in a future share sale, the company would aim to sell 70 percent to 80 percent domestically and the rest abroad. After the first IPO attempt, “we realized that luckily the name Interjet is well recognized in Mexico.”

The company is working with Grupo Financiero Banorte-IXE and JPMorgan Chase & Co. to sell as much as a 20 percent stake. According to the stock exchange a new listing requires at least 15 percent.

Passengers

Interjet, founded in 2005, planned to raise the money to add routes and buy planes, a preliminary prospectus showed. The company ordered 15 SuperJet regional airplanes from Sukhoi Civil Aircraft Co. this year. The planes will start operating in November 2012 and Interjet has the option to buy five more.

Aleman said the airline wants to double the number of passengers it serves annually to 8 million.

Interjet currently handles 29 routes, Aleman said. It recently started a flight to Guatemala and it plans to add flights to Colombia, Cuba, Canada and the U.S.

Interjet’s 2010 sales rose 51 percent to $404 million from $268 million the previous year, according to a presentation provided by Miguel Aleman Velasco, who is Aleman Magnani’s father and founded the company with his son. The company’s net income climbed 344 percent to 251.3 million pesos ($21.6 million) in the first quarter, the prospectus showed.

Interjet and Grupo Aeromexico SA, the country’s biggest airline, are expanding after their largest rival, Cia. Mexicana de Aviacion, filed for bankruptcy and halted operations last year. Interjet’s market share jumped to 25 percent in May, up from 14 percent in July 2010, according to data compiled by the Ministry of Communications and Transportation.

--With assistance from Jonathan J. Levin in Mexico City. Editors: Jonathan Roeder, Marie-France Han

To contact the reporters on this story: Adriana Lopez Caraveo in Mexico City at adrianalopez@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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