Satmex to file Section 304 bankruptcy, present restructuring plan under deal with creditors

New York, July 29 - Satelites Mexicanos, SA de CV's noteholders said they have reached an agreement with the company under which it will make a Section 304 bankruptcy filing in the United States and present a restructuring plan by Oct. 31.

In return the noteholders will withdraw their involuntary Chapter 11 petition.

The noteholders - the ad hoc committees holding the senior secured floating-rate notes due 2004 and the 10 1/8% senior notes due 2004 with $385 million of debt between them - said they were pleased to reach a consensual agreement and one that will give the U.S. Bankruptcy Court a role in the company's restructuring.

Satmex had been seeking to have the Chapter 11 petition dismissed and wanted instead to restructure under a concurso mercantil in Mexico.

The noteholders said a concurrent Section 304 proceeding will provide a forum for them to seek relief "if there is any misconduct or other improper activities in connection with the concurso mercantil proceedings."

The noteholders also said they hoped the company, its equity holders and the Mexican government would now "engage in good faith restructuring talks, which were terminated by the company after an agreement-in-principle had been reached with the creditors in December 2004."

The agreement was announced at a hearing in the U.S. Bankruptcy Court for the Southern District of New York.

Satmex's involuntary Chapter 11 case was begun on May 25 when the creditors filed a petioin in the hope of implementing a proposed restructuring that had the support of creditors holding nearly three-quarters of the company's outstanding debt and that included sufficient debtor-in-possession financing to fund the launch of the Satmex 6 satellite.

Satmex followed with a concurso mercantil filing in Mexico on June 29.

The Chapter 11 case number is 05-13862.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.