Vitro 2013 notes accelerated; judge rules on counterparty request

By Caroline Salls

Pittsburgh, April 13 - Vitro SAB de CV has received a notice of default and acceleration on its $216 million outstanding principal amount of senior notes due 2013, according to a company news release.

Vitro said it is focusing its efforts on reaching a consensual restructuring agreement with creditors based on its debt capacity.

According to the release, the company expected the acceleration notice, and it could not impact Vitro's ability to continue normal operations while continuing the negotiation process with bondholders.

In addition, Vitro said justice Richard B. Lowe III of the Supreme Court of the State of New York has issued a ruling regarding a request for summary judgment made by counterparties in the company's derivatives transactions.

Specifically, the company said Lowe granted the counterparties' motions as to liability only and denied them as to the amounts sought by the counterparties, finding that the financial institutions had not provided enough information to verify the methods and accuracy of their calculations.

The court then referred the issue of damages to a special referee for further proceedings and recommendation to the court.

As a result, Vitro said the summary judgment motions will be held in abeyance pending receipt of the report of the special referee's recommendations.

The company said it is analyzing the court's decision, as well as its appellate rights, and preparing for the upcoming proceedings before the special referee.

Since Vitro and a majority of the defendants involved in the lawsuits are Mexican legal entities with the vast majority of their assets in Mexico, the company said any decision by a U.S. court will have to be enforced in Mexico and validated by a Mexican court.

Vitro is a Nuevo Leon, Mexico-based glass manufacturer.

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