Grupo TMM wins support from 64% of noteholders for restructuring

By Jeff Pines

Washington, Jan. 12 - Grupo TMM said it now has voting agreements from about 64% of its noteholders in support of the company's restructuring proposal.

The Mexico City-based transportation company will make a registered exchange and offer new senior secured notes due 2007 for its existing 9½% notes due 2003 and its 10¼% senior notes due 2006.

TMM previously announced on Dec. 18 that it has reached agreement on a restructuring with an ad hoc committee of holders of its 9½% senior notes due 2003 and 10¼% senior notes due 2006. The committee represents holders of 43% of the $176.9 million principal amount of 9½% notes and $200 million principal amount of 10¼% notes.

TMM said at that time that the restructuring will be implemented through a registered exchange offer of new senior secured notes along with a consent solicitation and solicitation for a prepackaged bankruptcy filing.

Under terms of the agreement, TMM will exchange new senior secured notes on a one-for-one basis for the existing notes and will also make a 5% incentive payment in the form of additional notes. Accrued interest will be paid new notes at the coupon rate on the notes up to May 14 and at 11.5% from May 15 onwards.

The new senior secured notes will be guaranteed by TMM's wholly owned subsidiaries and will be secured by a lien on substantially all assets of TMM and the guarantors.

They will mature after three years with TMM having an option to extend for a further year on payment of a fee.

The coupon will be 10½% in cash for the first three years. TMM will have the option of paying 2% in cash and the remainder in new notes or its American Depositary Receipts at a total rate of 12%, increasing to 13% in the third year.

Up to $150 million of the notes will be callable at par with the remainder callable at 101.

TMM will ask exchanging holders of the 10¼% notes for their consents to the elimination of substantially all of the covenants under the indenture and to waive any default arising from the failure to pay interest on the notes when due.

Holders of both series of notes will also be asked to consent to a pre-packaged proceeding under Chapter 11 of the U.S. Bankruptcy Code or a concurso mercantil under the laws of Mexico. The bankruptcy option will be used if the minimum tender condition is not achieved.

The exchange will require the participation of holders of 98% of the 9½% notes and 95% of the 10¼% notes.

TMM's financial adviser is Miller Buckfire Lewis Ying & Co. LLC (contact Martin F. Lewis on 212 895-1805 or Ronen Bojmel at 212 895-1807). The bondholder's financial adviser is Houlihan Lokey Howard & Zukin Capital (contact Alan D. Fragen at 310 788-5338 or Oscar A. Mockridge at 212 497-4175).

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