IE 11 is not supported. For an optimal experience visit our site on another browser.

In Connection With the Restructuring Process of Vitro, S.A.B. DE C.V.

/ Source: GlobeNewswire


Reference is made to VITRO, S.A.B. DE C.V.'s press release on January 18, 2011 addressed to the public providing information with respect to its restructuring process. We believe it is important to provide the following details and clarifications:

a)         Contrary to Vitro's statement that it sought an agreement with all of its creditors, despite being directly informed that the Ad Hoc Group of Vitro Noteholders, which collectively own more than $735 million of Vitro's $1.2 billion of outstanding Senior Notes, opposes the Company's plan, Vitro has refused to even meet with the Ad Hoc Group of Vitro Noteholders, much less attempt to reach agreement with its members. The Senior Notes have been in payment default for nearly two years and more than $300 million in aggregate past-due interest is owed by Vitro.

b)         Contrary to Vitro's allegation that its plan is opposed only by a small "minority" of noteholders, the plan has in fact been rejected (and is opposed) by the Ad Hoc Group of Vitro Noteholders, which collectively own more than 60% of outstanding Senior Notes and approximately 50% of Vitro's total third-party unsecured debt.

c)         Contrary to the allegations of Vitro regarding the reasons its plan has been rejected, the Ad Hoc Group of Vitro Noteholders has unanimously rejected Vitro's proposal, because the offer represents an unacceptably poor economic return to Noteholders that is inconsistent with the Company's financial capabilities, it improperly leaves the current shareholders unimpaired, and has been crafted solely between Vitro and certain affiliated parties in a direct attempt to transfer value away from third-party creditors. 

d)         In an attempt to overcome the fact that its consent solicitation has received support from only 10% of Vitro's third-party creditors that were solicited, Vitro is relying on the support of (i) an affiliated party who has been induced to accept the consent solicitation with patently preferential transfers and other special consideration and (ii) $1.9 billion of purported intercompany claims controlled by direct and indirect subsidiaries of Vitro and which may have recently been manufactured to cram down the offer on non-consenting third- party creditors.

e)         Contrary to the allegations of Vitro regarding improper participation in Vitro's concurso proceeding, the Ad Hoc Group of Vitro Noteholders and its members have not participated in Vitro's pre-pack concurso in any form or fashion. The dismissal of the pre-pack concurso is only attributable to the procedural and substantive decisions made by the Company for an improper purpose. Specifically, the Mexican Court has referenced that the Company cannot use the $1.9 billion of intercompany claims to declare its pre-pack concurso effective and that the holders of intercompany claims are not creditors within the meaning of the concurso law. Also, Vitro failed to disclose that the Noteholders have commenced involuntary concurso cases against Vitro and certain of its subsidiaries which have not been dismissed and remain pending before the Mexican Court.

f)          Contrary to the allegations of Vitro that the efforts of the Ad Hoc Group of Vitro Noteholders put Vitro's business and employees at risk, any jeopardy to Vitro's business or employees has been caused solely by Vitro's shareholders' efforts to improperly retain their full ownership and control of the Company without providing a full recovery to creditors. The Ad Hoc Group of Vitro Noteholders cannot be faulted for merely trying to protect their rights as creditors.

h)         The Ad Hoc Group of Vitro Noteholders remains open to a negotiated settlement, so long as the consideration is consistent with the economic capabilities of Vitro and treats creditors according to their respective rankings and priorities.

Sincerely Yours,


CONTACT: Chanin Capital Partners LLC Brian Cullen (310) 445-4010 Mark Catania (310) 445-4010 White & Case LLP John Cunningham (305) 995-5252 Richard Kebrdle (305) 995-5276