SAN PEDRO GARZA GARCIA, Mexico, Dec. 13, 2010 /PRNewswire/ -- Vitro S.A.B. de C.V. (BMV: VITROA) announced today that the settlement payment for the cash tender offer conducted as a modified Dutch auction (the "Tender Offer") in respect of Vitro's outstanding senior notes (the "Old Notes") will be delayed due to the disruptive actions by certain members of the so-called "ad hoc committee" of holders of the Old Notes.
As previously announced, the Tender Offer was expected to settle on December 10, 2010. However, without notice to Vitro or any of its affiliates or any of the participants whose notes they seek to attach, three funds managed by Aurelius Capital Management (collectively, "Aurelius") filed suit against Vitro and several of its subsidiaries in New York State court on December 3, 2010, premised on Vitro's default and non-payment of the Old Notes, and obtained from the court a pre-judgment order of attachment (the "Aurelius Order") on any assets of Vitro located in New York. On December 9, 2010, certain funds managed by Elliott Management Corp. obtained a pre-judgment order of attachment (the "Elliott Order") similar to the Aurelius Order (together with the Elliott Order, the "Orders"). On December 9, 2010, the Aurelius Order was served on D.F. King, which acts as the depositary for the Tender Offer. As a result, D.F. King has determined not to direct the settlement of the Tender Offer until it receives further guidance from the New York court as to whether its instructions to settle the Tender Offer will violate the terms of the Orders and has refused to instruct the Depository Trust Company ("DTC") to complete the settlement.
Vitro and its wholly-owned subsidiary Administracion de Inmuebles Vitro, S.A. de C.V. ("AIV"), which is not a defendant in either the Aurelius Action or the Elliot Action, launched the Tender Offer jointly and have taken the necessary steps to secure a prompt hearing from the New York court for the purpose of obtaining a determination that the settlement of the Tender Offer does not violate the Orders. A hearing has been scheduled for December 16, 2010, in the New York court, at which Vitro and AIV will seek that determination, as well as a determination that the distribution of the consent payments to the holders who have provided their consents to the Exchange Offer and Consent Solicitation (which Vitro fully intends to make as previously announced) are likewise permitted. Vitro and AIV believe that the settlement of the Tender Offer, and the distribution of the consent payments as previously announced, in accordance with the applicable offering documentation, would not violate the Orders and look forward to a prompt resolution that permits all parties to proceed pursuant to the terms of the offering documentation as previously announced.
Vitro and AIV have been advised by the depositary that, as of the Tender Offer Expiration Time on December 7, 2010, approximately US$44 million in aggregate principal amount of Old Notes had been tendered pursuant to the Tender Offer. As previously announced, Vitro and AIV will accept all of the Old Notes tendered pursuant to the Tender Offer at a price of US$575 per $1,000 principal amount of Old Notes, the purchase of which Old Notes will be financed with the net proceeds of the Loan Agreement between AIV and Fintech Investments Ltd. As described in the solicitation statement, as payment for AIV's obligations under the Loan Agreement, AIV will cause all of such tendered Old Notes to be settled directly with, and delivered to, Fintech. Settlement of the Tender Offer will proceed as soon as possible following clearance from the New York court.
"The actions of Aurelius, Elliott or other litigious bondholders will not disrupt the overall plan for Vitro's restructuring, and Vitro is committed not to permit such actions to frustrate the efforts of tendering holders to sell their bonds as contemplated by the tender offer documents," stated Mr. Claudio Del Valle, Vitro's Chief Restructuring Officer. "As was the case in some recent restructurings, the goal of these opportunistic U.S. vulture funds in this case is to extract for themselves as much short-term gains as possible through coercive litigation, at the expense of Vitro's long-term creditors and other stakeholders and in total disregard of the company's long-term financial debt capacity and viability. As we have said repeatedly, Vitro will not be bullied or intimidated by these aggressive, litigious measures," Mr. Del Valle further added.
As previously announced, Vitro is making the relevant consent payments to all participating creditors who provided their consents to the Exchange Offer and Consent Solicitation in respect of their Restructured Debt pursuant to lock-up agreements or the parallel solicitation in Mexico relating to Vitro's outstanding Certificados Bursatiles as previously scheduled and will make the relevant consent payments to holders of Old Notes who validly tendered their Old Notes in the Exchange Offer and Consent Solicitation as soon as possible following clearance from the New York court or otherwise in a way that does not violate the Orders.
Vitro will be filing its pre-packaged Concurso Plan with the relevant Mexican court no later than December 16, 2010. Vitro and its advisors are fully confident that Vitro's Concurso Plan, which has been prepared and negotiated with the advice and approval of some of the leading insolvency law practitioners in Mexico, will be approved by the Mexican court notwithstanding the various baseless allegations made in the press and circulating in the market relating to certain legal aspects of Vitro's proposed restructuring plan.
Fernando del Castillo, partner at the Mexican law firm of Santamarina y Steta, SC, acting as Fintech's special concurso mercantil counsel, has reviewed Vitro's Concurso Plan and filings, pursuant to a confidentiality agreement with the company, and has stated that: "In my opinion and from the perspective of Mexican law, Vitro's plan of reorganization meets all the requirements to be approved and become binding on all unsecured creditors of the company." He further commented: "Intercompany claims held by affiliates of the debtor are allowed to participate and vote the debtor's plan for the purpose of confirmation of the debtor's plan. This is in fact a tested aspect of the Concurso Law as evidenced in various recent high-profile cases in Mexico where claims of subsidiaries in a concurso process have voted a plan of reorganization of its parent company and their vote has counted for such approval".
Vitro does not intend to extend the expiration time of the Exchange Offer and Consent Solicitation beyond the new expiration time of December 21, 2010. Following such expiration time, creditors of the company will still be able to voluntarily consent to the Concurso Plan and enter into lock-up agreements with Vitro but will not be entitled to receive a consent payment (of up to 10% of the aggregate principal amount of the Old Notes they hold) in respect of their participation in the Concurso Plan. Accordingly, Vitro strongly encourages creditors who have not yet provided their consents to the Exchange Offer and Consent Solicitation to carefully evaluate the terms and conditions of the proposed restructuring (including the announced consent payments) and consult with their own advisors or the independent legal and financial advisors appointed by Vitro to respond to inquiries from, and act on behalf of, interested holders. Vitro believes that it is in the best interest of all long-term creditors of the company to voluntarily participate in Vitro's proposed restructuring (either before or after the expiration time of the Exchange Offer and Consent Solicitation) as they will be the interested parties that would be most adversely affected by a protracted and adversarial insolvency process that would only serve to delay their receipt of the restructuring consideration under the Concurso Plan.
Vitro, S.A.B. de C.V. (BMV: VITROA), is the leading glass manufacturer in Mexico and one of the largest glass manufacturers in the world backed by more than 100 years of experience. Through our subsidiary companies we offer products with the highest quality standards and reliable services to satisfy the needs of two distinct business sectors: glass containers and flat glass. Our manufacturing facilities produce, process, distribute and sell a wide range of glass products that form part of the everyday lives of millions of people as well as offering excellent solutions to multiple industries that include: wine, beer, cosmetic, pharmaceutical, food and beverage, as well as the automotive and construction industries. In addition, we supply raw materials, machinery and industrial equipment to different industries. We constantly strive to improve the quality of life of our employees and of the communities in which we operate by generating employment and economic prosperity based on our focus on quality and continuous improvement, as well as through our ongoing efforts to promote sustainable development. Located in Monterrey, Mexico, and founded in 1909, Vitro currently has major facilities and a broad distribution network in 10 countries in the Americas and Europe with products that can be found throughout all around the world. For more information Vitro's website can be accessed at: http://www.vitro.com
This announcement contains statements about future events regarding Vitro, S.A.B. de C.V. and its subsidiaries. While Vitro believes that forward-looking statements are based on reasonable assumptions, all such statements reflect Vitro's current views with respect to future events and are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in this press release. Many factors could cause Vitro's actual results, performance or achievements to be materially different from anticipated future results, performance or achievements that may be expressed or implied by such forward-looking statements. In particular, completion of the offers described above or the Concurso Plan on the basis described, or at all, is uncertain. Vitro does not assume any obligation to, and will not, update these forward-looking statements.
SOURCE Vitro S.A.B. de C.V.