Mexico’s Homex gains court approval of plan, looks to restart business

By Kali Hays

New York, July 10 – Desarrolladora Homex, SAB de CV received approval of its proposed reorganization plan from the First District Court of Culiacán, Sinaloa, México, according to a Friday news release.

The company said that with the court approval it is “poised to continue with the reactivation of its operations.”

Gerard de Nicolás, chief executive officer of Homex, said that he is “fully confident that the company will thrive...and once again be a stable employer and Channel for Mexican families to have access to quality homes,” according to the release. “We are very pleased to successfully conclude the concurso mercantil procedure, and we are very motivated and prepared to continue to reactivate our operations and satisfy the growing demand in the Mexican housing market.”

As previously reported, a majority of Homex’s creditors also support the plan.

The plan involves the conversion of unsecured claims, other than specified statutory claims, into the reorganized company’s equity, stock options for unsecured creditors that vest upon the achievement of valuation hurdles and a committed Ps. 1.5 billion new capital investment in the form of a convertible loan.

The investment would be made by some members of the informal committee, Proyectos Adamantine, SA de CV, Sofom, ENR (Adamantine), other creditors and members of Homex’s management team.

A management incentive plan is also included in the reorganization, based principally on agreed-upon operating performance metrics, to align the objectives of the Homex management team and the new equity holders.

Homex said the proposed Ps. 1.5 billion new capital investment, together with the revolving credit facilities of Ps. 1.85 billion to be provided by Adamantine and its affiliates, will provide the necessary capital for Homex to reactivate its operations, fund long-term capital improvements and provide a sufficient liquidity cushion to execute its comprehensive business plan.

Initial disbursements were received from four previously approved credit facilities from Banco Santander and one previously approved credit facility from Lagatus, SA de CV, an affiliate of Adamantine.

Homex will reactivate a housing portfolio composed of four housing projects in the cities of Morelia, Puebla, La Paz and Leon, to be financed by Banco Santander, and up to 19 housing projects across the country to be financed by Lagatus1, the release said.

Homex is a Culiacan, Mexico-based homebuilder focused on affordable entry-level and middle-income housing in Mexico and Brazil.

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