Vitro Secures Legal Protection to US Assets

Troubled Mexican glassmaker Vitro obtained a temporary restraining order from the US Bankruptcy court in Dallas that will help the company protect its assets from creditors as it proceeds with the restructuring of $3.6bn in debt, including $1.9bn in intercompany obligations. The court’s move is a step before it decides whether to give a nod to Vitro’s motion of enforcing its debt restructuring plan in the US, Vitro says. The court’s decision can block Vitro boldholder funds from attempting to seize accounts receivable Vitro collects from US customers. The Mexican company finalized its debt restructuring plan in late February, despite staunch opposition from bond holders. The company pushed forward the unpopular deal by counting internal company debt owed to its own subsidiaries to gain a majority vote it its own debt restructuring. Debt holders have attempted several legal challenges to Vitro’s debt restructuring, but the company has a so far gained approval for the plan from the Mexican legal system. As it stands, the company’s restructuring proposal includes $814.7m in new 2019 bonds, a fee of up to $32.7m and mandatory convertible debt of $95.8m. JPMorgan has estimated that creditors who accept the deal may recover between 48 and 60 cents on the dollar, depending on the level of debt holder support.