MEXICO CITY (Reuters) - Mexico's Vitro
Under the deal, Monterrey-based businessman David Martinez' Fintech fund will buy all the debt held by U.S. hedge funds that were fighting Vitro in court over payment, the company said in a statement.
"This ends the litigation, we're very happy," Vitro Chief Executive Hugo Lara told Reuters.
Glassmaker Vitro, which makes flat glass and glass containers for cosmetics and other uses, will now focus on expanding its business, Lara said.
The company will soon present a business plan for 2013 to its board for approval and it will update investors with guidance for the year once that plan is approved, he said.
Vitro sees opportunities to expand in its core markets in Mexico and the United States, as well as its cosmetic glass container business in Europe, he said.
"We will seek options for reducing debt as soon as possible," Lara added. He added that Vitro has not yet begun talks with banks, noting it was too early for that.
The Fintech agreement must be approved by U.S. and Mexican courts. Nonetheless, the company is confident it will win that approval, Lara said.
Fintech will receive a 13 percent stake in a Vitro subsidiary and $235 million in debt with a two-year maturity that will be issued by the same subsidiary, the company said in a filing with the Mexican Stock Exchange.
Fintech is confident that the company can capitalize on its outstanding growth prospects and "we are excited to participate as a financial partner," said Martinez in a statement.
Vitro went through a $3.4 billion bankruptcy reorganization in Mexico in 2011. U.S. creditors strenuously opposed that plan, which short-changed creditors while preserving $500 million for shareholders.
Hedge funds Aurelius Capital Management and Elliott Capital Management, which had made a name for themselves for their drawn-out battle with Argentina, had led the legal fight against Vitro in the United States.
A U.S. judge last year ruled in favor of the funds and declined to enforce the Mexican plan on U.S. creditors, finding it was contrary to U.S. regulations.
Vitro continued to fight that ruling until it announced last month that it was in talks with creditors.
Aurelius declined to comment and Elliott did not immediately respond to a request for comment on the agreement announced on Monday.
Shares in the company closed up 5.17 percent at 32.54 pesos.
(Reporting by Michael O'Boyle and Elinor Comlay, additional reporting by Tom Hals; Editing by Gerald E. McCormick, John Wallace and Diane Craft)
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