Vitro America and Related Vitro Subsidiaries
Enter Into Asset Purchase Agreement with Private Equity Firm
April 6, 2011
Vitro America LLC in Memphis, Tenn., announced
this morning that it and three other U.S. indirect subsidiaries
of Mexican glassmaker Vitro, S.A.B. de C.V., have filed a motion
asking the U.S. Bankruptcy Court for the Northern District of Texas
to enter orders for relief for the four subsidiaries under Chapter
11 of the U.S. Bankruptcy Code. They have also entered into an agreement
to sell substantially all of the assets of Vitro America, including
Binswanger Glass, to an affiliate of Grey Mountain Partners LLC,
a private equity firm based in Boulder, Colo.
The bankruptcy courts orders for relief for Vitro America
and Super Sky are expected to be entered today. The entities that
have requested entry of the orders for relief are Vitro America
LLC (of which Binswanger is a part); Super Sky International Inc.;
Super Sky Products Inc.; and VVP Finance Corp.
Vitro America will be filing a motion with the court seeking authorization
to obtain $30 million in debtor-in-possession (DIP) financing from
its pre-petition lender, Bank of America, as well as an additional
$7.5 million from Vitro SAB. Vitro America and Super Sky intend
to use their current cash availability and the DIP funding to fulfill
their post-petition ordinary course obligations to employees, customers
and trade vendors as they come due during the sale process.
"Vitro America and Super Sky intend to continue to operate
in the ordinary course as the sale process is carried out,
says Arturo Carrillo, president and chief executive officer of Vitro
America. Based on the expectation of continued litigation
related to the Vitro SAB bonds, we determined that a sale of substantially
all of the assets of Vitro America and Super Sky at this time is
in the best interest of these businesses, their employees, and all
of their other stakeholders. Despite efforts over the last five
months to mediate or have the involuntary Chapter 11 cases dismissed,
it became apparent that Vitro America and Super Sky would need to
be separated from any litigation related to the legal dispute between
Vitro SAB and the dissenting bondholders so that we could continue
to operate in the ordinary course. Fortunately, Vitro America and
Super Sky have a strong asset base. In addition, Bank of America
and Vitro S.A.B have continued its support of Vitro America and
Super Sky throughout this challenging period and will continue to
help ensure that we have adequate funding and liquidity during the
He continues, We are grateful for the continued support from
our customers, suppliers and employees as we have sought to address
the legal issues presented by the involuntary petitions that have
made the sale and related Chapter 11 proceedings a necessity. We
look forward to concluding the sale within 60 to 90 days and remain
focused on providing outstanding products and service to our customers.
Last week, a federal bankruptcy judge had
ruled that he would decide at a later, unknown date whether
subsidiaries of Mexico-based glass manufacturer Vitro SAB would
be placed into involuntary Chapter 11 bankruptcy. Four Vitro SAB
creditors, unhappy with a debt settlement offer, had
filed a petition for involuntary bankruptcy in November 2010
against 15 of Vitro's U.S. subsidiaries, including Vitro America.
This is not the first time Grey Mountain Partners LLC has shown
interest in the glass industry. The investment firm was the stalking
horse bidder of flat glass fabricator Arch Aluminum & Glass'
assets in January 2010.
The transaction is subject to bankruptcy court approval and other
closing conditions specified in the agreement. In compliance with
Section 363 of the U.S. Bankruptcy Code, qualifying bidders will
also have an opportunity to submit higher and better offers for
evaluation through a court-supervised competitive bidding process.
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