IUSA’s Tubo De Pasteje Wins Approval of Bankruptcy Restructuring Plan
Tubo de Pasteje SA, a unit of copper-tubing maker Industrias Unidas SA, won court approval of its bankruptcy restructuring plan paying noteholders in full with new debt.
U.S. Bankruptcy Judge Kevin Carey approved the company’s plan to swap debt at a hearing today in Wilmington, Delaware. Creditors overwhelmingly supported the turnaround plan, which didn’t receive any objections at the hearing.
The plan is “designed to maximize recoveries to all creditors and enhance the financial stability” of the reorganized company, Tubo said in court papers.
Holders of $200 million in 11.5 percent notes will get new Series A notes in the same amount plus interest, which will be secured by the stock of Tubo’s U.S. unit, Cambridge-Lee Holdings Inc., according to the reorganization plan.
Tubo entered bankruptcy after defaulting on the 11.5 percent notes following a slowdown in construction and a surge in copper prices, according to court documents. Industrias Unidas, known as IUSA, issued the notes, which were secured by a pledge of Cambridge-Lee stock. Mexico City-based IUSA didn’t file for bankruptcy.
The 11.5 percent notes traded at 81.25 cents on the dollar yesterday, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
Biggest Manufacturer
Industrias Unidas bought Cambridge-Lee Industries Inc. in 1993, according to the company’s website. Cambridge-Lee acquired Reading Tube Corp. in 1996, making it one of the world’s biggest manufacturers of copper tube for commercial applications such as water supply, air conditioning and refrigeration.
Under the plan, lenders that extended about $803,000 of credit will share in the Series A notes, court papers show. Holders of more than $145 million in so-called “copper debt notes” and holders of $24.5 million of commercial paper will get unsecured Series B notes in exchange for their claims.
The company will reinstate about $39.8 million in debt owed on a Bank of America Corp. loan, as well as about $62.3 million owed on a General Electric Capital Corp. loan.
The case is In re Tubo de Pasteje SA de CV, 09-14353, U.S. Bankruptcy Court, District of Delaware (Wilmington).
To contact the reporter on this story: Michael Bathon in Wilmington, Delaware, at mbathon@bloomberg.net.
To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net.
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