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Mexicana airline declared bankrupt

Date

A Mexican judge has declared Mexicana de Aviacion, one of Latin America's oldest airlines, bankrupt and ordered the sale of the debt-ridden company's assets.

The company, founded in 1921, had suspended its operations in August 2010 and was under a form of bankruptcy protection allowing the company to negotiate with creditors and make restructuring plans.

Investors expressed interest in the company but a financial rescue never materialised despite extensions given by the court to provide the company more time to find a solution.

A district judge on Friday declared the company "in a state of bankruptcy" and ordered the sale of "rights and assets" to pay back lenders, the Federal Judicial Council said in a statement.

Two subsidiaries, Click and Link, were also declared bankrupt.

When it suspended operations, Mexicana had $US786 million ($A854 million) in assets and debts totalling $US864 million.

The airline used to fly to 22 countries, carrying 22,000 passengers per day.

AFP

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