Mexican Judge Gives Final Nod to Vitro

Mexico’s Fourth District Court for Civil and Labor matters issued a final approval for Vitro’s debt restructuring plan. The troubled Mexican glassmaker is pushing forward with a $3.6bn debt restructuring that has angered bondholders. The court’s ruling in essence gives the company a stamp of approval for the proposal using the Mexican insolvency law, Vitro says. Despite bondholder opposition, the company has so far managed to approve the plan by using roughly $1.9bn in intercompany debt to give itself enough voting power to approve what has been largely an unpopular restructuring plan. 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 debtholder support. Observers fear the restructuring could limit the financing options for other Mexican corporate issuers in the future.