Grupo Aeromexico SAB won court approval to eliminate $1.1 billion in debt and hand an ownership stake to Apollo Global Management Inc., the investment firm that helped keep the airline afloat after it filed bankruptcy in reaction to the Covid-19 pandemic.

The ruling from U.S. Bankruptcy Judge Shelley Chapman came after the company cut last-minute deals with holdout creditors, including Invictus Global Management and Corvid Peak Capital Management. They had objected to the reorganization proposal, which would hand ownership stakes to senior debt holders Apollo and Delta Air Lines Inc.

Mexico’s second-largest airline filed for bankruptcy in the U.S. in 2020 as the pandemic caused a severe downturn in travel. Aeromexico saw the number of passengers it carried plummet more than 90% as governments grounded flights and travelers stayed home. The carrier, unlike its counterparts in the U.S. and Europe, received little to no support from the government.

Apollo, which led the $1 billion debtor-in-possession financing, will receive a 22.38% stake while Delta will have 20%. A group of Mexican investors will hold a 4.1% stake, while the remaining shares will be distributed among new investors and creditors. Under earlier terms of the deal, Apollo was also poised to collect $150 million in cash.

“Aeromexico employees can now rest easy, and people in Mexico too, now that their flagship carrier has made its way through Chapter 11,” Chapman said Friday. “We’re going to keep our fingers crossed that Covid won’t send us more curveballs.”

Equity Increase

Earlier this month, shareholders approved an equity increase for $4.27 billion. The carrier will issue 682.1 billion new shares to be paid by capitalizing $3.4 billion in liabilities and injecting $828 million.

Chief Executive Officer Andres Conesa, Chief Financial Officer Ricardo Sanchez Baker and Chairman Javier Arrigunaga will remain in their current roles, according to the plan.

Aeromexico shareholders had also previously confirmed Arrigunaga, Conesa, Valentin Diez Morodo, Antonio Cosio Pando, Jorge Esteve Recolons, Eduardo Tricio Haro and William Easter III as board members. New to the board are Apollo’s Antoine Munfakh and Bogdan Ignaschenko, as well as Delta’s Glen Hauenstein and Andres Borrego from Credit Suisse. Two additional board seats will be filled at a later date.

Aeromexico operates routes within Mexico and connecting it internationally to the U.S., Canada, Europe and Asia. Before its bankruptcy proceeding, Delta Air Lines Inc. was its biggest shareholder.

The case is Grupo Aeromexico, S.A.B. de C.V., 20-11563, U.S. Bankruptcy Court, Southern District of New York (Manhattan).