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Maxcom Completes Successful Debt Restructuring, Exits Bankruptcy

October 29, 2019

New York -- Paul Hastings LLP, a leading global law firm, announced today that it represented Maxcom Telecomunicaciones, S.A.B. de C.V., a Mexican facilities-based telecommunications provider, in the successful restructuring of its senior notes.  In the restructuring, Maxcom’s existing bondholders were issued new senior secured notes, junior PIK notes, and cash in exchange for existing senior secured notes. The restructuring also included a Ps. 330 million capital infusion from Maxcom’s equity holders, resulting in an improved capital structure and debt service profile for the company and positioning it to compete more successfully in the Mexican telecommunications market.

Maxcom initially attempted an out of court solution through an exchange offer and consent solicitation that included, at Paul Hastings’ suggestion, an innovative dual track process.  The consent solicitation included a simultaneous solicitation of votes on a prepackaged Chapter 11 bankruptcy plan of reorganization to be filed in New York. This was a unique use in Latin America of a pre-filing bankruptcy solicitation combined with an exchange offer and consent solicitation. Having obtained support of the prepackaged Chapter 11 plan from the holders of more than 66 2/3% of the bonds voting, the company filed for bankruptcy in New York. The plan was confirmed in just 28 days, a remarkable feat given the amount of initial opposition to the plan from a majority of bondholders, with last minute agreements to the terms of the plan literally being negotiated on the steps of the bankruptcy courthouse on the day of the plan confirmation hearing.

Paul Hastings Latin America partners Mike Fitzgerald, Joy Gallup and Arturo Carrillo led the exchange offer process and debt and equity issuance teams which included counsel Pedro Reyes; associates Eduardo Gonzalez; foreign associates Diego Plowells and Lucia Guardone and law clerk Mercedez Taitt-Harmon.

Bankruptcy and Restructuring partner Pedro Jimenez led the team advising on the Chapter 11 process, which also included Irena Goldstein and Derek Cash, along with Litigation partners Jay Worthington and Kevin Broughel and associate James Ferguson.  Tax advice was provided by partner David Makso and associate Rob Wilson.

At Paul Hastings, our purpose is clear — to help our clients and people navigate new paths to growth. With a strong presence throughout Asia, Europe, Latin America, and the U.S., Paul Hastings is recognized as one of the world’s most innovative global law firms.