updated 11/18/2010 8:46:54 AM ET 2010-11-18T13:46:54

NEW YORK, Nov. 18, 2010 (GLOBE NEWSWIRE) -- Today, certain members of the Ad Hoc Group of Vitro Noteholders (the "Ad Hoc Noteholder Group") – which is comprised of holders, or investment advisors to holders, of approximately $500 million in principal amount of the Senior Notes due 2012, 2013 and 2017 (collectively, the "Senior Notes") issued by Vitro S.A.B. de C.V. ("Vitro") - commenced involuntary bankruptcy cases (the "Cases") under chapter 11 of the U.S. Bankruptcy Code against fifteen of Vitro's U.S. subsidiary guarantors (the "U.S. Subsidiary Debtors"). The Cases are pending before the United States Bankruptcy Court for the Northern District of Texas (the "U.S. Bankruptcy Court").

By written guaranties entered into in 2007 and 2008, the U.S. Subsidiary Debtors are unconditionally liable for all amounts due by Vitro under the Senior Notes, including the approximate principal amount of $1.2 billion, plus accrued interest and fees. This debt was accelerated following its default almost two years ago. 

By commencing these Cases, such members of the Ad Hoc Noteholder Group are continuing the Group's efforts to maximize recoveries for all holders of Senior Notes (the "Noteholders"), whether from Vitro or the U.S. Subsidiary Debtors, and are hopeful that, by invoking the protections of the U.S. Bankruptcy Code and the oversight of the U.S. Bankruptcy Court on the ongoing process, any restructuring will be fair, transparent and administered according to existing law.

Opposition to the Solicitation

In addition, the Ad Hoc Noteholder Group and its counsel have now fully reviewed the "Tender Offer, Exchange Offer and Consent Solicitation" launched by Vitro in connection with its anticipated prepackaged Concurso plan in Mexico dated November 1, 2010 (the "Solicitation"). The Ad Hoc Noteholder Group opposes the Solicitation.

The Ad Hoc Noteholder Group believes that Vitro's Solicitation does not offer adequate consideration to the Noteholders. We believe Vitro's plan significantly undervalues the Company, undercounts the amount and ratable portion of the Noteholders' claims, and inappropriately redistributes value away from Noteholders to Vitro's shareholders and insiders.  

Vitro claims that Noteholders may miss out on a cash consent fee unless such holders agree to the Solicitation. The Ad Hoc Noteholder Group, however, believes that any such payments made to such Noteholders may be found to be void or voidable when challenged under applicable Mexican or U.S. law. Furthermore, the DFI Notes and the Other Debt (as defined in the Solicitation), whose claims are treated as being pari passu with the Senior Notes in the Solicitation, either do not share the same guarantees that the Senior Notes have or may have inappropriately received guarantees that are subject to avoidance under applicable Mexican or U.S. law.

We also believe that the Solicitation is coercive and lacks proper disclosure. Rather than negotiate in good faith with its creditors or offer a reasonable restructuring proposal that would fairly and conclusively resolve long-standing debt defaults, Vitro instead launched the Solicitation without support from the Ad Hoc Noteholder Group or any other non-insider creditor of which we are aware.

Solicitation Provides Insufficient Disclosure

Vitro launched its Solicitation on November 1, 2010, even though at that time it had already admitted defects in its disclosure obligations to the U.S. Securities and Exchange Commission (the "SEC"). As a result of these defects, on November 5, 2010, the SEC directed Vitro to withdraw its request to terminate the registration of its debt and equity securities with the SEC and its reporting obligations with the SEC, or to file its late Annual Report on Form 20-F for the year ended December 31, 2009 together with other materials required to be filed or become current in its reporting obligations under the Securities Exchange Act of 1934. A copy of the SEC's November 5, 2010 correspondence to Vitro can be found on EDGAR.

The Ad Hoc Noteholder Group believes that the information that Vitro is required to, and so far failed to, file with the SEC is critical for any Noteholder to make an investment decision regarding whether to accept the Solicitation and the securities offered thereunder. For example, the Annual Report on Form 20-F should have included updated consolidating financial information and many material documents identified in Vitro's solicitation statement which were never filed with the SEC or otherwise made publicly available – including the substantive transactions and agreements with which Vitro seeks to orchestrate the Solicitation and proposed prepackaged concurso plan. Indeed, the updated consolidating financial information should include disclosure concerning alleged Intercompany Claims, which are vitally important to Vitro's threat that it will use these claims to vote to cram down Vitro's plan on non-consenting Noteholders.

At this time, the Ad Hoc Noteholder Group continues to review all available options and reserves all of its available legal and contractual rights and remedies against Vitro, its affiliates and all other persons or entities actively involved in Vitro's ongoing attempts to avoid paying its legitimate obligations arising under U.S. debt securities.

The foregoing shall not be construed as tax, legal, business, financial, accounting or other advice, and Noteholders are encouraged to consult their own advisors. 


Ad Hoc Noteholder Group          

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