Vitro Announces Extension of Expiration Time and Responds to Baseless, Misleading Statements of Dissident Minority Bondholders

SAN PEDRO GARZA GARCIA, NUEVO LEON, Mexico, Nov. 23, 2010 /PRNewswire-FirstCall/ --  Vitro S.A.B. de C.V. (BMV: VITROA) announced an extension of the expiration time for its tender offer and exchange offer and consent solicitation (the "solicitation transactions") and responded to misleading statements made by dissident minority bondholder group.  

Vitro extends the expiration time at the request of holders wishing to participate in the solicitation transactions.

On November 22, 2010, Vitro (or the "Company") issued a supplement to its tender offer and exchange offer and consent solicitation statement dated November 1, 2010 (as supplemented and together with the related letter of transmittal, the "offer documents").  This supplement includes certain technical changes to the procedures described in the offer documents to facilitate participation in the solicitation transactions and provides certain updating disclosure.

As described in further detail in the supplement, Vitro is extending the expiration time at the request of market participants, in spite of having the required majority to implement the Concurso Plan, to facilitate participation in the solicitation transactions.  Vitro has been receiving numerous procedural questions regarding the solicitation transactions and has been working, and will continue to work, diligently to answer any questions of bondholders to ensure their participation in such transactions.

Both offers were previously scheduled to expire at 9:00 a.m., New York City time, on December 1, 2010.  Vitro is extending the expiration time for both offers to 5:00 p.m., New York City time, on December 7, 2010. Following the expiration time, Vitro plans to initiate promptly the previously announced pre-packed insolvency process in Mexico.

Both offers apply to all three series of Vitro's outstanding senior notes, which are described in the following table:

Vitro is also changing the definition of the term "Record Date" in the offer documentation to 5:00 p.m., New York City time, on November 30, 2010.  This change was also requested by holders who purchased senior notes after November 1, 2010 and who wish to participate in the solicitation transactions.

Vitro responds to misleading statements of minority dissident bondholders clearly aimed at disrupting Vitro's restructuring process

On November 17, 2010, a minority group of four bondholders representing approximately US$75 million, or approximately 6% of the outstanding bond debt to be restructured, commenced involuntary cases under Chapter 11 of the U.S. Bankruptcy Code in the Northern District of Texas against Vitro's U.S. subsidiaries which are guarantors of the bond debt.  

The bankruptcy petition was signed only by these four bondholders. No other bondholders have stepped forward to initiate litigation against Vitro notwithstanding the unsubstantiated statements made by the advisors to these dissident bondholders in an effort to influence creditor participation and manipulate the market in Vitro's securities. In view of these and other irregularities, Vitro has engaged the law firm of Susman Godfrey, L.L.P. as special litigation US Counsel, in order to analyze the potential rights that Vitro may exercise in the United States against this ad hoc group of dissident bondholders and its advisors.

The allegations regarding the transactions and the disclosure provided in Vitro's offer documents are baseless

Vitro's exchange offer and consent solicitation, including the restructuring plan pursuant to the Mexican insolvency law, has been structured, prepared and negotiated, at arms length, with the advice and approval of some of the leading insolvency law practitioners in Mexico.  Accordingly, Vitro is confident that any challenges that may be brought against its restructuring plan based on these minority bondholders' baseless allegations will not succeed.    

Bondholders who consent pursuant to the offer documents will not in fact be subject to adverse consequences that have not been disclosed by Vitro. The ad hoc bondholder group has clearly not carefully reviewed the disclosure as thoroughly as they claim.  In the event that Vitro waives the conditions of the exchange offer and consent solicitation or otherwise amends the exchange offer and consent solicitation in a manner that is materially adverse to holders of the debt subject to restructuring, noteholders will be informed and allowed to withdraw their consent, as described in greater detail in the offer documents.

Actions by dissident holders will not change proposal; Vitro expects success

As described in the offer documentation, Vitro engaged in active, good faith negotiations with a group of institutional bondholders for over a year and a half (including paying more than US$4.3 million in fees and expenses of such group's legal and financial advisors). After more than year of negotiations with this group of bondholders, the Company in October of this year presented its final restructuring proposal to the group indicating that if it was not accepted by the group it would go to the market without the support of the group. At the time, the differences between Vitro's offer and the Bondholder's ad hoc Committee request was only marginal.

The restructuring proposal reflected in the offer documentation represents Vitro's final restructuring proposal.  Vitro will not engage in any further negotiations with the dissent, minority bondholder group who have initiated legal actions against Vitro's U.S. subsidiaries, or to otherwise improve the terms of its proposed restructuring reflected in the offer documentation.  As described in the offer documentation, Vitro fully intends to file its Concurso Plan for approval in Mexico shortly after the expiration of the solicitation transactions.  

The public statements made by the dissent bondholder group alleging that bondholders who choose to participate in Vitro's outstanding restructuring offer will be worse off (or would otherwise receive a lower recovery) than those who do not participate are blatantly misleading and false and contrary to the express terms of the restructuring offer described in the offer documentation.  As described in the offer documentation, bondholders who do not participate in the Company's restructuring offer and consent to the Concurso Plan on or prior to the expiration date of the offer will give up a substantial upfront cash consent fee, currently offered to all creditors, of no less than 5% and no more than 10% of the principal amount of bonds they hold (which will be payable shortly after the expiration of the restructuring offer and regardless of whether the Concurso Plan is ultimately approved or not).  

Bondholders who do not participate in the restructuring offer will nonetheless receive the same pro rata portion of the Restructuring Consideration described in the offer documentation upon approval of the Company Concurso Plan, but they will not receive the upfront cash consent fee previously described.  

The dissident minority's group's public (and misguided) allegations of legal impropriety relating to certain transactions entered into by the Company with respect to the settlement of certain financial derivative claims, certain intercompany claims and the consent fee described in the solicitation statement (and referenced above) amount to nothing but baseless allegations.  All of the Company's transactions relating to the settlement of certain financial derivative claims and the intercompany claims that will be participating in the Company's Concurso Plan were reviewed and approved by some of the leading corporate and insolvency law practitioners in Mexico and implemented in accordance with applicable Mexican law.  Accordingly, the Company is fully confident that the spurious challenges that may be brought in respect of these transactions will be discredited and set aside by the relevant Mexican court.      

Despite the desperate attempts by dissident holders to disrupt the process, Vitro continues to expect that both offers will be concluded successfully.  "Due to a clear reflection of a divided ad doc Bondholder Committee, Vitro strongly encourages its bondholders to objectively analyze the terms and conditions of the tender offer, and the exchange offer and consent solicitation," stated Mr. Claudio Del Valle, Chief Restructuring Officer of Vitro, "and we also urge each of them to respond to the tender offer and the exchange offer and consent solicitation promptly."                

Further information related to tender offer and exchange offer and consent solicitation procedures

D.F. King & Co., Inc. will act as the depositary for the tender offer and information and exchange agent for the exchange offer and consent solicitation for holders of senior notes. Questions regarding the tender offer and exchange offer and consent solicitation and requests for additional copies of the tender offer and exchange offer and consent solicitation materials may be directed to D.F. King & Co., Inc. at (800) 431-9633 (toll free) or (212) 269-5550 (bankers and brokers).  Holders of restructured debt other than the senior notes may contact Vitro at +52 (81) 8863-1731 (attn: Carlos Garza).

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.