Mexican Telecom Client Completes Restructuring After More Than Three Years

November 29, 2007

On November 29, after nearly three-and-a-half years of work, Cleary Gottlieb client Grupo Iusacell, Mexico’s third-largest mobile telecommunications company, closed the last stage of its debt restructuring. The first ever restructuring involving secured debt widely held by international investors, the operating company debt restructuring was effected through a concurso mercantil proceeding in Mexico, as was the holding company debt restructuring. The total indebtedness restructured was $800 million (not including past due interest).

Grupo Iusacell faced novel Mexican insolvency law issues, an involuntary U.S. bankruptcy filing by a dissenting creditor group and a multitude of creditors at various levels of the Group’s capital structure. The restructuring included a rights offering; the issuance of equity into a trust for holding company creditors as security for newly-issued holding company debt; two exchange offers and consent solicitations; two separate concurso mercantil proceedings; the issuance of three different tranches of secured debt issued in reliance on the exemption from registration provided by Section 3a-10 of the Securities Act; the restructuring of bank debt (including of a second operating company); and the receipt of exemptive relief from the SEC from certain requirements under the Trust Indenture Act.