Vitro Reaches Settlements with Creditors, Pending
March 4, 2013
by Penny Stacey, email@example.com
Vitro S.A.B. de C.V. says that company officials have entered into
settlement agreements with creditors and an investment company in
hopes of ending all litigation between Vitro and certain creditors
in Mexico and the U.S. over the past two years. The agreements will
allow the company to complete its restructuring process. The settlement
is still pending court approval, according to the company.
Under the settlement agreement, Fintech Advisory Ltd., an investment
company, will purchase from the members of the Ad Hoc Group all
of their holdings of bonds and pay to the Indenture Trustees and
the Ad Hoc Group members an amount to cover fees, costs and expenses
incurred by the Indenture Trustees and the Ad Hoc Group members.
In addition, certain members of the settling parties have agreed
to grant one another mutual releases which cover, among other things,
all claims related to the court proceedings and certain costs and
fees, according to a statement from Vitro.
The parties also have agreed to consensually dismiss all suits,
actions and appeals between and among them in Mexico and in the
United States, according to Vitro.
Under Vitro's agreement with Fintech, the investment firm "will
acquire the substantial majority of the bonds from the non-consenting
creditors, will relinquish the legal actions against Vitro and its
subsidiaries in the U.S. and Mexico associated with these bonds
and will consent to the Concurso plan that was approved by the Federal
Courts of Mexico, in respect of these bonds and claims."
"These actions will increase the approval rate of such plan
to almost 99 percent of the recognized creditors," writes Vitro.
Additionally, Vitro officials say they will cease their collection
actions in Mexico for costs and damages against the non-consenting
creditors and drop the lawsuits it filed in the U.S., thus ending
all legal proceedings against them.
Finally, Fintech will receive shares of a wholly owned subsidiary
of Vitro, representing up to 13 percent of its equity and a note
for $235 million (U.S. dollars) with a two-year maturity, which
will be issued by the subsidiary.
"Fintech's participation was crucial in order to establish
the foundation for the agreements we have reached," says Claudio
Del Valle, Vitro's chief restructuring officer. "It provided
a means by which the non-consenting creditors could exit their positions,
and allowed Vitro to gain a new partner in Fintech, which we are
sure will add value to the company, as Fintech shares our vision
for the business."
Vitro officials had announced in mid-February
that they were in talks with creditors. In February 2009, Vitro
on more than $1 billion in bonds. The company completed a Mexican
court-approved debt restructuring plan this past February. A Texas
court ruled against enforcement of the reorganization in the U.S.
in June which led to the appeal.
In other news in the Vitro case, Mexico's First Civil Chamber of
the Superior Court of Justice of the State of Nuevo Leon recently
ruled in an appeal filed by Pilkington in the Vitro case. Pilkington
had filed an appeal in the case alleging that the company's
Extraordinary General Shareholder Meeting of Vitro Plan S.A. de
C.V., held December 8-11, 2006, was invalid. The court, however,
ruled that the meeting-and the decisions made during the meeting-were
valid and has ordered Pilkington to pay legal expenses for the judgment,
according to a statement from Vitro.
During the 2006 meeting, Vitro shareholders approved a merger of
a Vitro creditor with Viméxico S.A. de C.V. The merger allowed
Vitro's flat glass unit to reduce its debt by $135 million (U.S.
dollars), but diluted Pilkington's shares, according to Vitro.
The recent ruling confirms the September 19, 2011, ruling issued
by the First Court of Concurrent Jurisdiction of the First Judicial
District of the State.
Pilkington officials had not yet responded to requests for comment
at press time.
This story is an original story by AGRR™ magazine/glassBYTEs.com™. Subscribe to AGRR™ Magazine.
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