(Reuters distributed the following article on June 23.)
MEXICO CITY — Mexican transport company TMM, which has had a rough time renegotiating its debt, offered creditors on Wednesday the option to swap bonds now or face a debt restructuring under bankruptcy court supervision.
TMM, Mexico’s largest shipping and railroad operator, offered holders of outstanding bonds due 2003 and 2006 to exchange them for new senior bonds due in August 2007.
TMM said in a statement holders of about 72 percent of the outstanding bonds, with a value of $377 million, have agreed to exchange them.
TMM said bondholders that agree to the exchange before July 8 will receive a sweetener of $21.1 million in new bonds on a pro rata basis.
The already-expired May 2003 bonds with a value of $177 million have a coupon of 9.5 percent. The $200 million 2006 bonds have a coupon of 10.25 percent.
The company set a July 22 deadline for creditors to accept the bond swap proposed on Wednesday.
TMM said it will require tenders for at least 98 percent of the outstanding principal amount of the 2003 notes and at least 95 percent of the 2006 notes to move on with the exchange.
If the minimum tender conditions are not met, creditors have agreed for the company to seek for bankruptcy protection under U.S. Chapter 11 or Mexican law.
TMM operates the main rail line in the country via its subsidiary TFM with its U.S. partner Kansas City Southern KCS (KSU.N: Quote, Profile, Research) .
Local shares rose 1.39 percent to 29.10 pesos while its New York-traded stock was flat at $2.50.