Satmex restructuring gets the go ahead

30 Oct 2006

Creditors and shareholders of Mexican satellite operator Satmex have unanimously voted to accept the company’s restructuring plan, which is now free to go ahead, Satmex said in a statement. Last month Satmex was granted chapter 11 bankruptcy protection in the US, after the New York Bankruptcy Court ruled that the restructuring plan approved for Satmex by the Mexican courts was adequate to serve as the basis for bankruptcy proceedings in the US, where most of its creditors reside. Satmex has long struggled with an unmanageable debt pile, but in April formulated a final debt restructuring agreement ending two years of negotiations. The agreement covers USD523 million of defaulted debt and USD300 million of outstanding borrowings. The overwhelming majority of its creditors have now said that they will accept the deal and Satmex hopes to complete the process and emerge from chapter 11 before the end of the year. Upon completion of the restructuring creditors will own 76.4% of the company and the Mexican government 23.6%, although much of the foreign ownership will be classified as ‘neutral investment’ and the state will actually have 55% of voting rights.