Vitro Debt Restructuring Extended

A court appointed arbitrator has asked for an extension in Vitro’s $3.6bn debt restructuring, marking the latest salvo in a controversial debt overhaul for the trouble Mexican glass-maker. Javier Navarro, a mediator charged with tallying bond-holder support for the borrower’s restructuring proposal, asked the court on Thursday for a 45-day extension in a process originally scheduled to end on Nov 14. “This gives me more time so I don’t have to declare company bankruptcy,” but it is not intended to provide creditors with a longer period in which to act, Navarro tells LatinFinance. This comes as some creditors cry foul after a Mexican judge allowed Vitro to include $1.9bn in intercompany debt as part of the bondholder tally. This has essentially allowed the company to say that 51% of holders have agreed to the terms, but left other creditors arguing otherwise. Vitro’s offer includes $814.7m in new 2019 bonds, a fee of up to $32.7m and mandatory convertible debt of $95.8m. When all is said and done, JPMorgan reckons that creditors who accept the deal may recover between 48 and 60 cents on the dollar, depending on the level of debt-holder support. “Bondholders are being trampled on,” says a Vitro investor who declines to be named. A Vitro official would only say that under current conditions negotiations will likely continue until early 2012.