Alpha Holding restructuring talks continue following court dismissal

By Sarah Lizee

Olympia, Wash., Jan. 7 – Alpha Latam Management, LLC’s Mexican affiliates, Alpha Holding, SA de CV and AlphaCredit Capital, SA de CV Sofom, ENR, gave an update on discussions with noteholders in a Thursday evening press release.

On Nov. 10, Alpha Holding executed a nondisclosure agreement with various members of the informal group of holders of the $700 million 10% senior notes due 2022 and 9% senior notes due 2025 issued by Alpha Holding.

The noteholders and their advisers then negotiated and executed a plan support agreement to support the filing of a consensual pre-packaged Ley de Concursos Mercantiles proceeding and associated term sheet outlining the terms of the proceeding.

On Dec. 28, the company filed a request for the proceeding with the First Civil Federal District Court in Mexico City. However, the company said that, despite support from holders of 50% of the company's unsecured claims, the court dismissed the request on Jan. 5 on technical grounds.

The company, its advisers, and the noteholder group are considering all options, including an appeal and/or reconsideration of the dismissal.

Restructuring terms

According to a term sheet attached to the release, a financial adviser would identify and assess the Mexico portfolio and design a plan to maximize value of those assets, including through a sale. Proceeds could then be distributed through a trust structure to creditors.

The trust would also provide a specific clause to be agreed among the debtors and the participating creditors on the amount and administration of a wind-down budget.

The U.S. advisers for the companies and participating creditors would jointly analyze the need and timing to file a Chapter 15 petition in the U.S. courts to gain recognition of the concurso proceedings.

The plan provides for payment in full in cash of the costs of the estates, including the fees and expenses of the debtors’ professionals and the participating creditors’ professionals.

Holders of unsecured debt, including the bonds due 2022 and 2025, and unsecured contingent debt will receive, on a pro rata basis, payment derived from the sale of the debtors’ estate.

A portion of the debtors’ estate will be set aside and released to the applicable creditors once their claims are recognized by final and unappealable judgment, at which time those creditors will become entitled to receive their pro-rata portion of the reserved estate.

Any reserved estate that is not released because the relevant unsecured contingent debt or reserves are not recognized, totally or partially, as a result of a final and unappealable judgment, will be allocated between the debtors’ creditors, per their own ranking, on a pro-rata basis.

Holders of secured debt, including the intercompany loan under Chapter 11, will be only recognized and paid on the terms agreed with each of the secured creditors according to their existing contracts or secured creditors will be paid with the amount of the value of the corresponding collateral, and any deficiency will not be treated as unsecured debt if, by law or the terms of the debt documents, there is no recourse against the debtors.

The secured intercompany loan dated Aug. 1, 2021 between Alpha Capital SAS and AlphaDebit, SA de CV, as lenders, and Alpha Holding and AlphaCredit as borrowers, implemented within the Chapter 11 proceeding of Alpha Latam, will be repaid in full in cash.

Labor claims, including personal claims, will be preserved, recognized and paid in line with the contractual arrangements currently in effect.

The plan will provide the treatment of intercompany claims, other than the secured intercompany loan under Chapter 11, subordinated treatment.

Advisers

The company is represented by White & Case, Del Castillo y Castro, Creel, Rothschild & Co and AlixPartners. The noteholder group is represented by Brown Rudnick, Sainz Abogados and Houlihan Lokey.

Wilmington, Del.-based Alpha Latam Management is a technology-enabled financial services company that provides consumer lending products in Colombia. The company filed bankruptcy on Aug. 1, 2021 under Chapter 11 case number 21-11109. Alpha Holding and AlphaCredit are based in Mexico City.

© 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.