The agreement, which is subject to the negotiation of definitive documentation, envisions the exchange of the Existing Notes for new senior notes secured by liens on real estate and certain accounts receivable of the Company, subject to the terms and conditions described in the Transaction Terms.
FREMONT, CA: Grupo Posadas S.A.B. de C.V., a leading hotel operator, recently announced that it has reached an agreement (the "Agreement") with an ad hoc group (the "Ad Hoc Group") of holders of its 7.875 percent senior notes due 2022 (the "Existing Notes"), which, together with a supplementary group of holders who have expressed their support for the agreement, jointly represent more than a majority of the aggregate principal amount of the Existing Notes, to restructure the terms of the Existing Notes as outlined in the summary of the key transaction terms (the "Transaction Terms") posted on the following Company's website at the following link https://www.posadas.com/en/informacion-financiera#eventos relevantes.
The agreement, which is subject to the negotiation of definitive documentation, envisions the exchange of the Existing Notes for new senior notes secured by liens on real estate and certain accounts receivable of the Company, subject to the terms and conditions described in the Transaction Terms. The transaction will extend the maturity of the Company's note obligations by 5.5 years, to December 30, 2027, achieving a sustainable capital structure and allowing the Company to prioritize the use of cash for operating activities to preserve jobs and help Grupo Posadas hotels maintain their high quality. As a result, the Company will emerge from the epidemic in a stronger financial position and continue to be Mexico's largest hotel operator.
The Ad Hoc Group has agreed to assist the Company's launch of a prepackaged in-court restructuring case in the United States and has entered into a restructuring support agreement with the Company to make that process as efficient as possible. The Company and the Ad Hoc Group have agreed to negotiate the definitive papers governing the transaction in good faith in accordance with the RSA. The definitive documents will include the same economic terms as the RSA and other terms that are materially consistent with the RSA and will be in a form and substance that the parties can accept in line with the RSA. The transaction's implementation is still pending corporate approvals, including those from the Company's shareholders and agreement by all parties on definitive documentation and plan approval.
Employees, clients, and suppliers are not likely to suffer any negative consequences due to the transaction. During the anticipated financial reorganization, the Company's day-to-day operations, including the payment of employee wages and benefits and the fulfillment of the Company's obligations to its clients, suppliers, and other business partners, will continue as usual.
Since June 3, 2021, the Company has given the Ad Hoc Group with certain non-public information relating to the Company in connection with negotiations with the Ad Hoc Group regarding the restructuring of the Company's obligations under the Existing Notes (the "Disclosed Information"). The Company agreed to release the Disclosed Information if specific events occurred publicly, as stipulated in confidential agreements with the Ad Hoc Group members. To comply with the Company's responsibilities under the confidentiality agreements, this information is being released on the following website, along with the Transaction Terms: https://www.posadas.com/en/informacion-financiera#eventos relevantes.
Cleary Gottlieb Steen & Hamilton LLP serves as the Company's international legal counsel, while Ritch Mueller y Nicolau, S.C., and Creel, Garca-Cuéllar, Aiza y Enrquez, S.C. serve as its Mexican legal counsel, and DD3 Capital Partners serves as its financial advisor. Shearman & Sterling LLP serves as international legal counsel for the Ad Hoc Group, while Guerra, Hidalgo y Mendoza, S.C. and Mijares, Angoitia, Cortes y Fuentes, S.C. serve as Mexican legal counsel.