Vitro America CEO Comments on Tomorrow's Scheduled Auction
May 31, 2011
The U.S. Bankruptcy Court for the District of North Texas ruled earlier this month that it would permit Vitro America LLC and three other indirect Vitro subsidiaries to sell substantially all their assets, including Super Sky and Binswanger Glass, through an auction, which is scheduled for tomorrow at 9 a.m. CST in Dallas.
“There are three Conditionally Qualified Bidders,” Arturo Carrillo, president and chief executive officer of Vitro America told USGNN.com™ this afternoon. Carrillo noted that the deadline to submitting that qualifying bid was Friday, May 20. “The bidders are Grey Mountain; American Glass Enterprises, which is an affiliate of Sun Capital, the parent company of Arch Aluminum; and another company called VI Industries, which is affiliated with Villacero, a large, multinational steel company that is looking to diversify into other businesses, and has a strong interest in value-added distribution."
Sun Capital recently also acquired United Glass Corp., and has expressed interest in buying additional glass and metal industry companies. Regarding the entry of Sun into the bidding frey, Carrillo said, “We quickly learned that Sun Capital was interested in buying companies in the industry, they had made announcements of that sort.” He added, “We welcome as many bidders as possible … we’re very supportive of creating a robust auction.”
The auction is expected to take several hours, during which the three companies will have the opportunity to present the best offer to the court.
“They can bid by increasing the price but they can also increase other considerations, such as quickness to close, assuming more liabilities, more certainties, etc., so the company in consultation with the creditors committee comes out with the best and highest offer,” Carillo said. “And then in consultation with the creditors committee, we would seek approval from the bankruptcy court in a few days.”
He added that the auction would also name a “back-up bidder,” which, should the winning bidder not close the sale, would have the option of buying the company.
Carrillo said that at this point the best interest of the company also is the best interest of the creditors committee. “We’re in constant communications with them [the creditors committee] and we are very much aligned. It is clearly that our duty is to maximize the value for creditors so, frankly, we don’t have many differences at this point.”
He added, “Bankruptcy court gives you a clarity of purpose, which is to maximize the value of creditors. And we have done so to the best of our abilities.”
Following the result of tomorrow’s auctions, the next step will be in the hands of the entities. But Carrillo does note that suppliers should not be concerned. “To the extent that we have a robust auction, and we manage to increase the original price of $44 million to some number in the high 50s, I think, depending on legal fees and all, there would be a very strong possibility that all the suppliers recuperate monies owed in full. We worked to get as many bidders as possible. And we are helping them develop business plans. Our goal is for suppliers and creditors come out whole out of this process (or as close to it as possible).”
Still, what happens after tomorrow will be up to the winning bidder. “The new entity would make decisions,” Carrillo said. He added, “We’ve been in conversations with all three bidders. They truly value our brands, our products, our capabilities and the quality of our management team.
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