Mexico’s Grupo Posadas to miss June 30 interest payment on 2022 notes

By Wendy Van Sickle

Columbus, Ohio, June 25 – Grupo Posadas, SAB de CV decided not to make the $15.5 million interest payment due June 30 on its 7 7/8% senior notes due 2022, according to a press release on Thursday.

The company also does not expect to make the payment during the subsequent 30-day cure period.

The decision to miss the payment was made to maximize the company’s financial flexibility in the near term “and to better manage the unprecedented challenges affecting the hospitality industry in Mexico as a result of the Covid-19 pandemic,” the release states.

“This decision aims to prioritize the use of cash resources for the company's operating activities to help maintain the high quality for which Grupo Posadas' hotels are known and to preserve its relationships with, and its ability to honor its commitments to, clients, agencies, employees, suppliers, and other stakeholders. Importantly, this decision will enable the company to preserve as many jobs as possible,” Grupo Posadas continued.

The company said it hired DD3 Capital Partners, Ritch Mueller Heather y Nicolau, and Cleary Gottlieb Steen & Hamilton as advisers to analyze and develop constructive strategic solutions to serve the interests of all of its stakeholders.

Grupo Posadas expects to engage with its financial creditors, including holders of its international notes, after it completes a strategic review of its operating and financial plans.

The hotel company based in Mexico City.

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