Vitro has announced that it has provided the irrevocable notification for the prepayment of the Mandatory Convertible Debentures due in 2015. The aggregate outstanding balance of these convertible bonds, which have an annual fixed interest rate of 12%, will amount to USD 122.4 million, interests included, on 11 July 2013, the day the prepayment will be made.
Vitro S.A.B. de C.V., the leading glass producer in Mexico, reports that it has provided the irrevocable notification for the prepayment of the Mandatory Convertible Debentures due in 2015 (MCDs), which were issued pursuant to the restructuring agreement between Vitro and its creditors dated 3 February 2012.
The aggregate outstanding balance of these convertible bonds, which have an annual fixed interest rate of 12%, will amount to USD 122.4 million, interests included, on 11 July 2013, the day the prepayment will be made.
Adrian Sada Cueva, CEO of Vitro, stated: “Even though according to the concurso agreement the maturity of this obligation is 20 December 2015, we decided to make this prepayment to significantly strengthen our balance sheet and provide greater certainty to our shareholders, since it eliminates the contingency of a possible conversion of this debenture into shares of the company. In addition to these benefits, we will also be taking advantage of a 5% discount for paying in advance, and remove a debt that had an annual cost of 12%.”
Sada added that: “these obligations are mandatorily convertible into 20% shares of Vitro’s capital if they are not paid in full on or before the due date. With the prepayment, we have eliminated that possibility.”
To make this prepayment, Vitro will use proceeds from the sale of part of the land where its corporate offices are located as well as those coming from the sale of other non-operating assets. The company will also use released funds from accounts receivables previously withheld by customers, among other resources.
Claudio Del Valle, Vitro’s Chief Financial Officer, said: “It is important to highlight that Vitro is not only paying in advance, but that the company is doing so without interrupting its investment plans for the year. By eliminating this debt, we will improve our leverage.”