Durango to Dip Into Equity

As part of what is perceived as an imminent settlement with some creditors, Durango says in a statement released Tuesday that its board will vote on the terms and conditions of a new equity offering. It is not clear if shares to be issued would be new capital – which would dilute the Rincon family, which holds 68% of the company – or if the company intends to offer creditors part of the family’s equity stake as debt repayment. Durango, which is in talks to restructure $1.5bn in debt, said last week it had reached a preliminary agreement with 92% of its creditors, including bondholders. Its bonds rose 57% in the week ended April 3 on optimism for a settlement, according Credit Suisse. Durango shares closed yesterday at MXP6.51, up 32%.