(Bloomberg) -- Apollo Global Management Inc. is clashing with a group of bondholders over a $1 billion bankruptcy loan to Grupo Aeromexico SAB, holding up the Mexican airline’s restructuring effort, said people familiar with the matter.

The disagreement stems from debate over how much power Apollo will have to make key decisions, said the people, who asked not to be named because the talks are private.

The bondholder group, which took part in the first $200 million tranche of the debtor-in-possession financing led by Apollo, is trying to hold on to bargaining power, the people said. The two sides have diverging opinions about what they initially agreed to.

The impasse is crimping progress in Aeromexico’s Chapter 11 bankruptcy as the carrier seeks to weather an unprecedented collapse in air travel. The Mexico City-based company, which unlike U.S. airlines hasn’t received government aid, filed for court protection three months ago as the coronavirus pandemic devastated demand for flights.

Aeromexico declined to comment. Apollo and the ad hoc bondholder group, which is represented by law firm Akin Gump Strauss Hauer & Feld LLP, didn’t immediately comment.

The company’s bonds maturing in 2025 dropped for a fifth straight day on Wednesday to trade near 24.4 cents on the dollar.

Hearing Delayed

The DIP plan had been set for a final hearing last week before the U.S. Bankruptcy Court for the Southern District of New York but was delayed four times. “Discreet but important” details had yet to be hashed out, Aeromexico legal counsel Timothy Graulich said at one of the hearings.

The $1 billion rescue plan for the struggling airline is divided into two tranches. Of the first, $100 million has already been doled out. The second, for $800 million, will give creditors the option to get shares of the restructured company.

Graulich has argued that the “atypical” plan was appropriate under the circumstances. Judge Shelley Chapman commended the airline for “thinking outside the box.”

Other struggling airlines in Latin America have also faced hurdles. Latam Airlines Group SA, the region’s largest carrier, moved to modify its $2.45 billion bankruptcy loan package this month after a judge blocked its plan to repay some of the borrowing with new stock instead of cash. The plan won court approval on Sept. 18 after Santiago-based Latam added new lenders and removed the repayment feature.

Colombia’s largest airline, Avianca Holdings SA, is awaiting court approval for a $2 billion financing plan as it restarts flights while reorganizing under Chapter 11. The company structured the package to avoid relying on a controversial $240 million government loan, which is being held up by a Colombian court. The plan needs approval from a New York judge, who has scheduled a hearing for Oct. 5.

(Updates with bond performance in sixth paragraph.)

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