Maxcom Telecomunicaciones enters pre-packaged Chapter 11 bankruptcy

By Caroline Salls

Pittsburgh, Aug. 20 – Maxcom Telecomunicaciones SAB de CV and Maxcom USA Telecom, Inc. made a pre-packaged Chapter 11 bankruptcy filing Monday in the U.S. Bankruptcy Court for the Southern District of New York.

Maxcom USA chief executive officer and Maxcom Telecomunicaciones chief financial officer Erik Gonzalez Laureano said in a statement filed with the court that the Maxcom entities filed bankruptcy to permit the restructuring of the step-up senior notes due 2020 issued by the parent company and guaranteed by non-debtor subsidiaries.

As previously reported, Maxcom Telecomunicaciones announced in June that it was offering to exchange any and all of its $103,378,674 of outstanding step-up senior notes due 2020 for new 8% senior secured notes due 2024, junior payment in kind notes and cash.

Holders who tendered their notes on or before the early participation date will receive for each $1,000 of 2020 notes $550 of senior notes, $100 of junior PIK notes and $110 in cash. Holders who tendered their notes after the early participation date will receive for each $1,000 of 2020 notes $550 of senior notes, $100 of junior PIK notes and $100 in cash.

The company said the purpose of the exchange offer was to accomplish a financing restructuring, allowing the company to fund necessary capital expenditures and continue operations, and to allow the company to extend the maturity of the old notes, reduce its overall debt profile and reduce its interest expense burden.

Concurrently with the exchange offer, the company solicited votes from all holders of the old notes to approve the pre-packaged Chapter 11 plan of reorganization.

The company said it would seek confirmation of the plan in order to accomplish the financial restructuring contemplated by the exchange offer.

Maxcom said the plan will not alter or modify any of the company’s existing obligations to its customers, employees and vendors, and the company fully expects to continue operating its business in the ordinary course during the short amount of time that it expects the Chapter 11 case to remain pending.

Other than the restructuring of the old notes, the company said the plan proposes to render all other claims against it unimpaired.

Specifically, Maxcom said in the disclosure statement that it intends to have all other claims ride through the Chapter 11 case and plan unaffected and/or satisfied in the ordinary course of business.

In addition, all equity interests will be left unaltered.

According to court filings, Maxcom Telecomunicaciones had $360.77 million in total assets and $294.49 million in total debt as of July 31.

The company’s largest unsecured creditors are Qualtel SA de CV of Monterrey, Mexico, with a $1.7 million services claim, and Instituto Federal de Telecomunicaciones, with a $1.05 million fine claim.

The company did not list any other unsecured creditors with claims of $1 million or more.

Paul Hastings LLP is representing Maxcom in its Chapter 11 proceedings.

Maxcom is an integrated telecommunication services operator based in Mexico City. The Chapter 11 case number is 19-23489.

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