Vitro: bondholder deal seen closer

Mexico’s largest glassmaker Vitro, which has been in a legal battle with hedge funds over debt from the glassmaker’s USD 1.2 billion bond default in 2009, has gained the most in almost three years on the possibility that it’s near a settlement with US bondholders who have opposed the company’s Mexican restructuring.

Vitro SAB, Mexico’s largest glassmaker, may be near a settlement with US bondholders who have opposed the company’s Mexican restructuring.
Vitro has been in a legal battle with hedge funds such as Paul Singer’s Elliott Management Corp. over debt from the glassmaker’s USD 1.2 billion bond default in 2009. The two sides are in talks, according to legal filings in the US in late January and a recent Vitro statement to Mexico’s stock exchange.
The company is said to be “holding talks with creditors regarding its financial restructuring process.” Vitro, based in San Pedro Garza Garcia, said it would inform the stock exchange if it has any “material information” to disclose about the discussions.
A Mexican court approved Vitro’s restructuring a year ago. That proposal was rejected in June by US Bankruptcy Judge Harlin Hale in Dallas. The US Court of Appeals in New Orleans upheld Hale’s decision in November, ruling that Vitro’s Mexican reorganization plan wasn’t worthy of enforcement in the US because it absolved Vitro subsidiaries of their bond guarantees without the units being in bankruptcy anywhere.
The bondholders have contended that Vitro orchestrated fraudulent transfers before and during bankruptcy. In December, Vitro began legal action in Mexico seeking damages of as much as USD 1.59 billion from bondholders who sought to push it and 17 subsidiaries into involuntary bankruptcy.