Vitro Announces Completion of Reorganization Under the Ley de Concursos Mercantiles
February 24, 2012

by Sahely Mukerji,

Vitro S.A.B. de C.V. of Mexico has consummated the concurso plan approved by the Fourth Federal District Court for Civil and Labor Matters for the State of Nuevo Leon according to Mexican Insolvency Law (Ley de Concursos Mercantiles) on February 3.

In accordance with the terms of the concurso plan, Vitro issued new 8.0 percent notes due in 2018 (the "2018 Notes") and 12.0 percent mandatorily convertible debentures due in 2015 (the "MCDs") —together with the 2018 Notes, the "New Notes"— and paid a cash restructuring fee to third party payment trusts, which will issue the corresponding credit linked notes tied to the new notes and will deliver them and the restructuring fee to holders of recognized claims in the concurso mercantil proceedings that consented to the concurso plan, according to a February 23 company news release. Another trust will hold the restructuring consideration in favor of the holders of recognized claims that did not consent the concurso plan, for delivery to those holders who later execute and deliver the appropriate receipt and acknowledgement.  

By approving the concurso plan, the Mexican District Court: (i) discharged the obligations of Vitro and its subsidiaries under Vitro's: (1) 8.625 percent senior notes due February 1 (the "2012 Notes"), (2) 11.75 percent senior notes due November 1, 2013 (the "2013 Notes"), (3) 9.125 percent senior notes due February 1, 2017 and (4) other debt instruments; and (ii) ordered Vitro to issue to its unsecured creditors the 2018 Notes, guaranteed by, among others, certain subsidiaries of Vitro, the MCDs due in 2015 and to pay the restructuring fee.

"Vitro is emerging from one of the most challenging periods of its storied history,” says Claudio Del Valle, Vitro's chief restructuring officer, in the release. “Despite the efforts of a handful of highly litigious vulture investors, we have successfully implemented the concurso plan, thus beginning a new era for Vitro. Vitro is now a stronger, more competitive company, with a solid financial foundation and a bright future.”

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