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DirecTV Latin America files reorganization plan, unsecured creditors get 20% of claims
By Carlise Newman
Chicago, Dec. 12 - DirecTV Latin America, LLC filed its reorganization plan and disclosure statement in court and under the plan holders of allowed general unsecured claims will receive cash distributions equal to 20% of their allowed claims.
These distributions will be funded from the company's operating cash flow and a new credit facility to be provided by Hughes Electronics Corp., the parent company, according to a news release. The reorganized company will also use this exit funding to help fund its ongoing business expenses upon emergence from the reorganization process.
The creditors' committee has endorsed the plan and recommends that creditors vote to accept it. The plan was filed in the U.S. Bankruptcy Court for the District of Delaware.
Under the plan, DirecTV Latin America will continue to be a Delaware limited liability company whose members will be Hughes and Darlene Investments LLC, an affiliate of the Cisneros Group of Cos.
Hughes will receive more than 80% of the reorganized company's equity upon its emergence from Chapter 11 in consideration of its debtor-in-possession financing claim, as well as for assets to be contributed to the reorganized company and certain other claims. Darlene will receive a minority share of the equity.
Hughes and Darlene's contributions to the reorganized company will include their respective ownership interests in certain operating companies and related entities, and certain debts owed to them by those entities. This roll-up is expected to simplify the corporate structure.
The company's five-year business plan included in the disclosure statement projects that its subscriber base will increase to 3 million at the end of 2008 from 1.5 million at the end of 2003. The business plan also projects that DirecTV will begin to generate positive cash flow in 2005.
A court hearing to review the disclosure statement is scheduled for Jan. 9.
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