Vitro SAB (VITROA) closed at the highest level in almost 15 years after the company said a court upheld a ruling in a commercial case and speculation mounted that Mexico’s largest glassmaker would settle a separate legal dispute tied to its 2009 default.
The shares climbed 7.4 percent to 32.77 pesos in Mexico City, the highest closing price since March 23, 1998. Vitro has advanced 96 percent this year, while the benchmark IPC index of the Mexican stock exchange was little changed.
A Mexican appeals court ratified a favorable ruling in a dispute with Pilkington Group Ltd. over a 2006 transaction, Vitro said today. The court ordered legal costs to be paid by Pilkington, a unit of Nippon Sheet Glass Co., Vitro said.
Earlier this month, Vitro said it was in talks to settle a different legal battle with hedge funds including billionaire Paul Singer’s Elliott Management Corp. over debt from the San Pedro Garza Garcia, Mexico-based glassmaker’s $1.2 billion bond default.
“It’s both” the Pilkington ruling and the possible settlement with hedge funds bolstering Vitro shares today, said Rafael Escobar, an analyst with Vector Casa de Bolsa SA in Mexico City. The stock may also be rising as investors anticipate improved financial results, Escobar said.
Vitro said third-quarter earnings before interest, taxes, depreciation and amortization rose 25 percent to $105 million buoyed by higher capacity utilization and lower fees from debt restructuring. Sales rose 4.7 percent to $455 million.
While Vitro exited bankruptcy in Mexico a year ago, the company has struggled to gain recognition for that reorganization from courts in the U.S., its largest market.
A U.S. judge in Dallas rejected the company’s restructuring plan in June, saying it improperly extinguished bondholder claims against company units not in bankruptcy that guaranteed Vitro debt. In November, the U.S. Court of Appeals in New Orleans upheld that decision.
The glassmaker is in talks with holdout creditors, according to a company statement to the Mexican stock exchange on Feb. 11, pushing the shares to a 19 percent gain that day.
“The company’s financial situation has improved in the last few quarters,” Gerardo Copca, an analyst at Metanalisis SA, said in a telephone interview from Mexico City. “The restructuring process seems to be evolving well and there’s greater certainty that Vitro can get to a good settlement.”
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