Vitro to Unveil Debt Restructuring Plan

Mexican glassmaker Vitro says it expects to propose a debt restructuring plan next week. In a filing detailing Q2 numbers, the company’s chief restructuring officer Claudio del Valle says, “We continue conversations with our derivative counterparties and bondholders with the objective of achieving an organized debt restructuring and are now in the process of finalizing a restructuring proposal which we expect to submit to our creditors the first week of August.” Vitro bonds were yesterday quoted by BCP Securities as trading in the high 30s. That implies that the market is expecting the ultimate value of the notes to be in the low to mid 50s, says Jim Harper, analyst at BCP. He notes the market likely expects a restructuring to take at least 6 months, and like any other workout, involve a number of risks, which merit the 15 or so point discount from expected ultimate value. Vitro’s Q2 results include a 36% drop in consolidated sales and 91% decline in Ebitda from its flat glass division, which only serve to reaffirm the company’s weak ability to service debt. Earlier this year, bondholders organized under CarVal and ING. Vitro hired Rothschild in May to replace its original advisor Blackstone.