Unsecured holders of the international notes of Mexican non-bank financial institution Unifin would receive between 0-7% recovery according to a creditor presentation from the company seen by Debtwire.
The proposal was the subject of discussion today during a call of bondholders with their advisors, according to two sources who attended the call.
The bondholders in the ad hoc group were unhappy with the proposal, which would see the company continue as a going concern after its restructuring, according to the two sources.
“This offer is unattractive compared to liquidation,” said the first attendee. “I hope that at the last moment our advisors will make a better deal for us. Unfin does not want to liquidate so they want to make a deal. And the current offer is one which creditors do not want to accept, because liquidation gives almost the same chance of recovery.”
“I think the investors will vote for liquidation rather than to keep the company operating,” said the second call attendee.
An important issue for bondholders who are being offered 75% equity in the reorganized company is the quality of Unifin’s loan portfolio, which according to a company presentation had 75% loans with major risk exposure as of 30 June.
“Mexico is not in a hard recession or anything,” said the bondholder. “What could justify this percentage of bad loans? The trust of creditors in reorganization success and the business plan is low, because of this crazy track record.”
The bondholders will have 15 working days after the presentation of a creditor agreement by the conciliador, an auxiliary official to the court, to decide whether they will support the plan.
The ad hoc group holds sufficient debt to decide the approval of the proposed convenio or not, according to the first attendee and a source close to a secured creditor. The ad hoc group has claimed to represent 30% of the debt, according to the source close to the secured creditor.