Chilean Bus Operator in Prepackaged Bankruptcy

December 17, 2014

Cleary Gottlieb represented Chilean bus operator Inversiones Alsacia and Express de Santiago Uno and their affiliates in their prepackaged Chapter 11 reorganization, which became effective on December 17, 2014. The restructuring enabled Alsacia and Express, one of the largest bus companies operating in the Santiago, Chile metro system, to quickly and consensually restructure their senior secured debt in the United States, providing the Companies with needed liquidity and flexibility without causing any disruption to their day-to-day business operations. The bankruptcy was the first Chapter 11 case filed by a Chilean company since Chilean electricity provider Edelnor filed for Chapter 11 reorganization in 2002, a restructuring in which Cleary Gottlieb also represented the debtor.

Cleary Gottlieb represented Alsacia and Express, which were faced with lower-than-expected cash flows and a looming interest payment, in the Companies’ negotiations with their senior secured noteholders that resulted in an agreement to a debt-for-debt exchange of the senior secured notes that restructured the Companies’ repayment obligations and enabled them to continue operating in the ordinary course of business, which restructuring would be implemented through a prepackaged chapter 11 plan. Holders of the Companies’ existing notes received new notes that provide for reduced amortizations through 2018 but an extension of the maturity and additional amortizations if the Companies’ concessions are extended beyond 2018. Cleary Gottlieb then represented the company in its Chapter 11 restructuring, obtaining approval of the debt restructuring with overwhelming supported for the Companies’ plan of reorganization, which was confirmed by the Bankruptcy Court on December 5, 2014. Alsacia and Express emerged from Chapter 11 well-positioned to provide continued service to their Santiago customers.