Durango Says Close to Debt Deal

Mexican paper giant Durango says it has reached a tentative agreement with some 92% of its creditors to restructure its debt. In October, the company said it would look to restructure some $1.5bn, including over $500m at the holdco level and around $1bn at its subsidiaries. In 2007, the company issued $520m in 10.5% notes via Merrill Lynch, and in its Thursday statement, Durango says it has gained preliminary consent from the main group of holders. “This restructuring will allow the company to substantially reduce its debt, having achieved an equitable agreement which guarantees it a future of growth and development,” says Miguel Rincon Arredondo, CEO of Durango, in the statement filed with the Bolsa. The remarks lead one restructuring expert away from the process to speculate that means the deal involves a haircut, though details of the deal have to be unveiled. The company was heard to have hired at the time PriceWaterhouseCoopers, Rothschild and White & Case for advice. Durango underwent a messy restructuring in 2004 and the 2007 bond issue was supposed to have marked a comeback. Company officials did not return calls seeking comment.