Vitro Restructuring Proposal Remains Unfinalized; Company Continues to Work on Revised Proposal
August 10, 2010

As part of Vitro's debt restructuring discussions with creditors, the company recently presented a restructuring counterproposal to representatives of certain holders of senior notes, according to a company statement. Though the proposal was not accepted, company officials say "Vitro continues to focus its efforts on reaching a consensual restructuring agreement with its creditors and is currently working to finalize a consent solicitation statement, expected to be launched in the next few days."

The company's statement continues, "During this time, Vitro maintains the financial resources to continue providing uninterrupted high quality products and services."

The recent counterproposal provided for the restructuring of approximately $1.5 billion of Vitro's debt, which includes the Senior Notes and other impaired debt, and consisted of the following components:

  1. $500 million of new notes with an 8-year term, bullet amortization and cash interest payments of 3 percent in the first year, stepping up by 1 percent every year thereafter;
  2. $350 million of new notes with a 7-year term and interest payments of 3.0 percent and 4.0 percent in the first and second years, respectively, with 8.0 percent thereafter. However, the company would have the option to pay in kind (PIK) 100 percent of the associated interest during the first two years, and the new notes will have an amortization schedule of 2.5, 5, 12.5, 15, 15 and 50 percent in years two through seven, respectively;
  3. $80 million Mandatory Convertible Debentures with a 5-year mandatory conversion into 10 percent of the common stock of Vitro if not paid in full at maturity. The MCD provides a 10.5 percent PIK interest rate and prepayment discounts of 30.2, 24.2, 17.7, 10.6 and 2.9 percent in years one through five, respectively; and
  4. $75 million cash tender to retire debt. Approximately $275 million of the company's secured debt, account receivables financing programs and other unsecured debt, mainly at the subsidiary level, would not be affected by the proposed restructuring.

According to Albert Chico Smith, Vitro's corporate communication and social responsibility manager, these changes will have no impact on customers.

"Vitro continues to focus its efforts on reaching a consensual restructuring agreement with its creditors and is currently working to finalize a Consent Solicitation Statement, expected to be launched in the next few days," Smith told USGNN.com™. "During this time, Vitro maintains the financial resources to continue providing uninterrupted, high-quality products and services, which means we will continue serving our customers as usual."

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