TOLUCA, Mexico (Reuters) - Citigroup Inc (C.N) may sell its 37 percent stake in Grupo Aeromexico (AEROMEX.MX), the holding company of Mexico’s top airline, as the U.S. financial services giant continues to unload noncore assets, Aeromexico’s chief executive said on Wednesday.
A Citigroup subsidiary was one of several investors that pitched in a combined $250 million five years ago to take the then government-run air group private. Its main asset is the namesake Aeromexico airline.
“Since 2007, when (Citigroup) made the original investment, it was always said it was a temporary investment,” Aeromexico CEO Andres Conesa told reporters during an event at the main airport in the state of Mexico.
“So whenever they dump (the investment) - tomorrow, in five years or in 10 - it should not come as a surprise,” he added.
Citigroup’s Grupo Aeromexico stake made it the biggest individual investor in the Mexican company, but the bank has the stake in its Citi Holdings portfolio of extraneous assets it intends to shed.
Conesa declined to say what could happen to the 37 percent stake if it left Citigroup’s hands. A Citigroup spokeswoman declined to comment.
Airline Aeromexico’s operations received a big boost after its closest rival, Mexicana, stopped flying in the second half of 2010 because of overwhelming debt.
Grupo Aeromexico, which listed 17 percent of its capital in the Mexican stock exchange in 2011, has been bolstering its fleet with better and more cost-efficient aircraft. Earlier this month, Aeromexico finalized an order for 60 new Boeing Co (BA.N) 737 MAX planes, with an option for 30 more.
Delta Air Lines Inc (DAL.N) holds a stake of nearly 5 percent in Aeromexico, which has 37 percent of the domestic market and expects to transport 15.5 million passengers this year.
Additional reporting by David Henry, writing by Cyntia Barrera; editing by Matthew Lewis