Maxcom Telecomunicaciones prepackaged plan effective as of Oct. 11

By Caroline Salls

Pittsburgh, Oct. 11 - Maxcom Telecomunicaciones, SAB de CV's prepackaged plan of reorganization took effect on Friday, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

The plan calls for the exchange of $200 million of senior secured notes for notes with a reduced interest rate and longer maturity.

Specifically, Maxcom will exchange its 11% senior notes due 2014 for step-up notes due June 15, 2020.

The step-up senior notes will be issued in a total principal amount of $180.35 million, which reflects the amount of the senior notes, minus the amount of senior notes held in treasury by the company, plus the capitalized interest amount and will bear interest at 6% from the date of issuance until June 14, 2016, at 7% from June 15, 2016 until June 14, 2018 and at 8% from June 15, 2018 until the maturity date.

Ventura Capital Privado, Trust Number 1387, Javier Molinar Horcasitas and Enrique Castillo Sanchez Mejorada also agreed to launch an equity tender offer to purchase 100% of Maxcom's equity interests at a cash price equal to Ps. 2.90 per share and make a $45 million new capital contribution to the company in exchange for newly issued shares.

Reorganized Maxcom will issue common stock to the purchasers equal to the amount of the contribution divided by the per-share price.

According to a company news release, as a result of the restructuring of Maxcom's funded debt obligations under the plan and the parallel out-of-court transactions, including the simultaneous Mexican and U.S. tender offers and the new capital contribution, the company emerged from Chapter 11 with a healthy, sustainable balance sheet.

Maxcom said the new capital will allow it to continue to upgrade and expand its telecommunications network, thereby solidifying its long-term growth prospects and operating performance.

Creditor treatment

Creditor distributions will include the following:

• Holders of senior notes claims will receive a share of the step-up notes, cash equal to the amount of unpaid interest on the notes at the rate of 11% from Dec. 15 through April 15 and 6% from June 15 to the plan effective date and equity subscription rights;

• Holders of general unsecured claims will be paid in full in cash, including any required interest;

• Intercompany claims will either be waived and discharged, contributed to the capital of the obligor entity, subject to dividend, or remain unimpaired, at the reorganized company's election;

• Intercompany interests will be reinstated; and

• Subject to the equity tender offer and recapitalization agreement, all equity interests will be reinstated. Holders of equity interests will have the right to subscribe for shares of common stock sufficient to maintain their existing ownership percentage.

Maxcom, a Mexico City-based telecommunications provider of last-mile connectivity to micro-, small- and medium-sized businesses and residential customers, filed for bankruptcy on July 23. The Chapter 11 case number is 13-11839.

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