Vitro rules out bankruptcy

Grupo Vitro, the largest glass company in Mexico, has ruled out bankruptcy or terminating its operations, even though in recent weeks it decided not to pay certain notes which were due, in addition to…

Grupo Vitro, the largest glass company in Mexico, has ruled out bankruptcy or terminating its operations, even though in recent weeks it decided not to pay certain notes which were due, in addition to receiving court judgments in the United States. According to Albert Chico Smith, director of corporate communications for Grupo Vitro, the company will not close or fail, adding that Vitro has found the vast majority of its creditors willing to renegotiate. After the exchange rate volatility in October 2008 in the Mexican market, Grupo Vitro announced that its charges for derivative financial instruments linked to the exchange rate had risen considerably. Grupo Vitro reported a net loss to 31 December 2008 of approximately USD 358 million, days after the company was informed of a lawsuit filed by Credit Suisse International against a Vitro subsidiary in the Supreme Court of the state of New York, USA. The company has implemented a cost reduction plan with the aim of generating savings of between USD 80-120 million a year. The streamlining of the Vitro workforce forms an important part of the firm“s aggressive plan to reduce costs and expenses. The most important part of this adaptation was made in December 2008 and January 2009, according to Albert Chico. Vitro also decided to cancel two contracts to transfer or lease of aircraft as part of various initiatives to cut costs. “They are already on the ground and are not being used by Vitro executives or board members”, he said. “We are working to limit travel by our personnel; those who need to travel do so on commercial flights, including members of the Executive Committee and company directors”, said the manager. The company is also looking to divest the facilities and grounds of VitroClub.