Grupo Iusacell 10% noteholders file involuntary Chapter 11 case

By Caroline Salls

Pittsburgh, July 17 - Holders of Grupo Iusacell Celular SA de CV's 10% senior notes due 2004 filed an involuntary Chapter 11 bankruptcy petition against the company Friday in the U.S. Bankruptcy Court for the Southern District of New York, saying the company's debt exchange offer unfairly subordinates the 10% senior notes due 2004.

The petitioners are Gramercy Emerging Markets Fund, Greenwich, Conn., with a $55.44 million 10% notes claim; Pallmall LLC, Greenwich, Conn., with a $260,000 10% notes claim; and Kapali LLC, Greenwich, Conn., with a $180,000 10% notes claim.

According to court documents, the noteholders do not agree with the terms of Iusacell's offer to exchange the notes for new 10% senior subordinated second-lien notes due 2012.

The noteholders said Iusacell has not addressed their concerns on the exchange offer and has refused to negotiate a resolution.

On May 25, Iusacell Celular launched the solicitation of consents to exchange its tranche A loans for new senior floating-rate first-lien notes due 2011; and to exchange its tranche B loans and existing notes for 10% senior subordinated second-lien notes due 2012.

Consents are being solicited from holders of the company's $190 million of tranche A bank loans, $76 million of tranche B bank loans and $150 million of 10% senior notes due 2004.

The noteholders said the exchange offer documents combine the restructuring of both the loans and the existing notes, "without distinguishing between the amendment of the loan documents being discussed versus the exchange offer for the bonds that was ongoing."

In addition, the noteholders said the company intends to complete its debt restructuring under a concurso mercantil proceeding in Mexico. The noteholders said the terms of the restructuring would be imposed on them regardless of whether they approve of the company's restructuring plan.

In a court filing, Gramercy said it does not know why a reduction in principal on the 2004 notes is warranted, or why noteholders should have to pay in kind any portion of an operating company debt coupon given the consideration being given to holding company creditors and equity holders not being impaired.

Also, Gramercy said the exchange offer does not account for "significant past due interest" on the notes.

The company's primary U.S. assets are based in New York.

Iusacell is a Mexico City cell phone company. Its Chapter 11 case number is 06-11599.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.