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Mexican Companies Restructuring Through Crisis
 Emily Chasan - Reuters
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May 18, 2010
Corporate debt restructuring in Mexico has jumped over the past few years as companies struggled with bad bets on derivatives as well as the effects of the global recession.
While large Mexican companies rarely use the country's insolvency law, some major debt deals have been reached in the past year. The following lists some of the biggest recent deals in Mexico:
CEMEX SAB de CV
The world's No. 3 cement maker was hurt by a poorly timed $16 billion purchase of Australia's Rinker in 2007, loading up on debt just before the global financial crisis crippled its sales. The company had debt talks with banks in December 2008 and refinanced $3 billion a month later. Last August it refinanced $15 billion of its medium- and short-term maturities and said this month a bond swap would cut its debt by some $440 million.
COMERCIAL MEXICANA SAB de CV
The country's No. 3 supermarket operator ran into trouble in late 2008 after foreign exchange derivatives bets blew up. The retailer has told creditors it can realistically only repay $1.5 billion of as much as $3 billion in disputed obligations. It is expected to soon announce an agreement in principle to restructure its debt with creditors and file a "prepack" proceeding under Mexico's insolvency law.
VITRO SAB de CV
The Mexican glass maker suffered big losses on derivatives in 2008 and struggled with high debt and falling sales. The company has been working to get debtholders to accept a restructuring proposal related to $1.22 billion in defaulted bonds. Additionally, the company is trying to restructure some $200 million in derivatives-related debt.
SANLUIS CORPORACION SAB de CV
The autoparts maker is looking to restructure its debt this year to avoid falling out of compliance with payments. Its sales dropped last year amid difficulties in the global auto industry.
GRUPO INDUSTRIAL SALTILLO
Auto parts maker GISSA, which also ran into problems with derivatives, got creditors to accept a $152.4 million debt restructuring deal in December 2009.
SATELITES MEXICANOS SA de CV
Satmex, a struggling satellite operator, received a $267 million takeover offer from Echostar Corp (SATS.O) in March, but some of Satmex's bondholders are opposing the bid as it would modify their rights. The bondholders, who hold about $100 million in debt, have said they might prefer a stand-alone plan that would cut the company's debt. Satmex had previously filed for protection under Mexico's insolvency law in 2005.
CORPORACION DURANGO SAB DE CV
CODUSA, the country's largest paper and containerboard maker, filed a reorganization petition in November 2008 in Mexico, citing the rising cost of energy, the downturn of the U.S. economy, increased foreign competition and the appreciation of the Mexican peso. The bankruptcy filing was the company's second after an earlier filing in 2006 and CODUSA also filed a Chapter 15 proceeding in New York. The company spent months negotiating with creditors and announced a deal in April 2009 to restructure some $500 million of debt.
GRUMA SAB de CV
The corn flour producer and tortilla maker completed a debt restructuring in October 2009 after racking up huge losses on currency derivatives in 2008 when the Mexican peso plunged against the U.S. dollar. Its deal with creditors converted $738 million in derivatives losses into medium- and long-term debt and refinanced a 5-year $197 million loan.
METROFINANCIERA
The small Mexican mortgage firm defaulted on its debt last year and agreed with creditors to file a "prepack" bankruptcy in July 2009 under Mexico's insolvency law.
DESARROLLADORA METROPOLITANA SA de CV
DeMet, a Mexican homebuilder, defaulted on its debt in mid-2009 and said in November 2009 that it was progressing on a restructuring plan with creditors.
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