Vitro noteholder steering group opposes planned consent solicitation

By Angela McDaniels

Tacoma, Wash., Aug. 5 - The steering group for Vitro, SAB de CV's ad hoc committee of noteholders recommends that holders reject the company's planned consent solicitation, according to a news release from the steering group.

The noteholder committee said it represents holders of more than $500 million of Vitro's senior notes due 2012, 2013 and 2017.

As previously reported, Vitro has been in default under the notes due to its failure to make scheduled interest payments on Feb. 1, 2009, May 1, 2009, Aug. 1, 2009, Nov. 1, 2009, Feb. 1 and May 1.

The notes were accelerated earlier this year, which the steering group said makes the full $1.2 billion principal amount and unpaid interest immediately due and payable.

"Although the steering group has urged Vitro to offer restructuring terms and conditions that it is willing to support and publicly recommend to the broader group of noteholders, Vitro has apparently determined to launch a consent solicitation that will offer noteholders a huge discount to the face amount of their senior notes, hoping that small 'retail' and other uninformed noteholders will accept this lesser amount," the steering group said in Thursday's news release.

The steering group has been negotiating with the company for 18 months. In July, it rejected the company's latest restructuring proposal, saying it undervalues the financial condition of Vitro's business and its ability to satisfy senior notes claims.

"To date, the steering group has shown patience and restraint as Vitro made efforts to negotiate a resolution, but members may be forced to exercise remedies against Vitro for failing to honor its contractual obligations," the steering group said in the release.

Vitro is a Nuevo Leon, Mexico-based glass manufacturer.

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