Desarrolladora Homex, S.A.B. de C.V. announces filing of a pre-packaged concurso mercantil proceeding and disclosure of information provided to creditors in conjunction with its restructuring negotiations [RE-ISSUE]
Culiacán, Sinaloa, Mexico - April 30, 2014 - Desarrolladora Homex, S.A.B. de C.V. (the "Company") announces that it has filed a request for a pre-packaged concurso mercantil proceeding before the federal court in Culiacán. In accordance with Mexican law, the filing was presented, with a proposed restructuring plan and was supported by a group of creditors representing, in the aggregate, over 50% of the outstanding consolidated indebtedness of the Company and its subsidiaries filing for the concurso mercantil proceeding. . For more information regarding the concurso mercantil filing, please see the Company’s website: http://www.homex.com.mx/ri/index/htm. Copies of the petition, proposed restructuring plan and related exhibits are available to the public at the First District Court sitting in Culiacan, Sinaloa, Mexico, with file number 000001/2014.
In connection with the negotiations with an ad hoc group (the "Bondholder Group") of certain holders of the Company’s 7.500% Senior Guaranteed Notes Due 2015, 9.500% Senior Guaranteed Notes Due 2019 and 9.750% Senior Guaranteed Notes Due 2020, the Bondholder Group has received certain information relating to the Company and certain public and non-public information set forth herein and in the Annexes hereto, pertaining to the future possible consummation of a restructuring transaction, which as of this date had been maintained confidential under applicable contractual provisions (collectively, the "Disclosed Information").
The Disclosed Information includes (i) information with respect to the Company’s homebuilding operations, concurso process considerations, summary of the proposed concurso plan and the Company’s business and reactivation plan, including projections, the potential mechanics of future bridge loan funding, and certain other information (including non-public information) relating to the Company, as set forth in the Discussion Materials attached as Annex A hereto, (ii) information regarding the claims of the Company’s creditors (summarized on Annex B attached hereto), and (iii) a Preliminary Restructuring Term Sheet dated April 30, 2014 setting forth certain terms and conditions of the Company’s proposed restructuring plan and related transactions attached as Annex C hereto. An Exclusivity and Right of First Refusal Agreement, dated April 30, 2014 among the Company and certain members of the Bondholder Group relating to the potential provision of funding to the Company by such holders is summarized in the Preliminary Restructuring Term Sheet and a copy of the document may be found on the Company website at http://www.homex.com.mx/ri/index/htm.
Pursuant to a confidentiality agreement entered into with certain members of the Bondholder Group, the Company agreed to publicly disclose the Disclosed Information upon the filing of concurso mercantil proceedings, among other things. The information disclosed herein is being furnished to comply with the Company’s obligations under such confidentiality agreement and applicable law. The disclosure of these materials should not be regarded as an indication that the Company or any other person considered, or now considers, this information to be predictive of actual future results, and does not constitute an admission or representation by any person that such information is material, or that the expectations, beliefs, opinions and assumptions that underlie these materials remain the same as of the date of this disclosure and the information contained in these materials may have been superseded by subsequent developments. Readers are cautioned not to place undue reliance on these materials. The financial information reflected in the Disclosed Information does not purport to present the Company’s financial condition in accordance with accounting principles generally accepted in the United States, Mexico or any other country. The Company’s independent accountants have not audited or performed any review procedures on the Disclosed Information (except insofar as certain historical financial information may have been derived in part from the Company’s historical annual financial statements).
Projections are included in the Disclosed Information. Such projections have not been examined by auditors. The projections and other material set forth herein contain certain statements that are "forward-looking statements". These statements are subject to a number of assumptions, risks, and uncertainties, many of which are and will be beyond the control of the Company, including the continuing availability of sufficient borrowing capacity or other financing to fund future principal payments of debt, existing and future governmental regulations and actions of government bodies, natural disasters and unusual weather conditions and other market and competitive conditions. These statements speak as of the date indicated and are not guarantees of future performance. Actual results or developments may differ materially from the expectations expressed or implied in the forward-looking statements, and the Company undertakes no obligation to update any such statements. The projections, while presented with numerical specificity, are necessarily based on a variety of estimates and assumptions which, though considered reasonable by the Company, may not be realized and are inherently subject to significant business, economic, competitive, industry, regulatory, market and financial uncertainties and contingencies, many of which are and will be beyond the Company’s control. The Company cautions that no representations can be made or are made as to the accuracy of the historical financial information or the projections or to the Company’s ability to achieve the projected results. Some assumptions may prove to be inaccurate. Moreover, events and circumstances occurring subsequent to the date on which the projections were prepared may be different from those assumed, or, alternatively, may have been unanticipated, and thus the occurrence of these events may affect financial results in a materially adverse or materially beneficial manner.
Notwithstanding the support of the creditors to the concurso filing, the Restructuring Term Sheet indicates that there are certain terms remaining to be determined and as a result creditors may not support the concurso plan submitted for final approval in the concurso mercantil proceeding; therefore there can be no assurance that the Company will be successful in securing sufficient creditor support required under applicable laws to implement the restructuring transactions through a concurso mercantil proceeding before Mexican courts.
The Company continues to have limited liquidity to conduct its operations and meet its obligations. The Company is working to obtain additional financing during the course of the concurso mercantil proceeding. There can be no assurance that the Company will be successful in securing such additional financing, in which case the Company may not be able to continue its operations through the consummation of the restructuring.
About the Company
Desarrolladora Homex, S.A.B. de C.V. [NYSE: HXM, BMV: HOMEX] is a vertically integrated home-development company focused on affordable entry-level and middle-income housing in Mexico and Brazil. The Company is formed by four divisions: Mexico Division, International Division, Government Division and Tourism Division.
Desarrolladora Homex, S.A.B. de C.V. periodic reports and all other written materials may from time to time contain statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. Forward-looking statements involve inherent risks and uncertainties. We caution investors that a number of important factors can cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors include economic and political conditions and government policies in Mexico or elsewhere, including changes in housing and mortgage policies, inflation rates, exchange rates, regulatory developments, customer demand and competition. For those statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Discussion of factors that may affect future results is contained in our filings with the Securities and Exchange Commission.
Annex A - Discussion Materials
Annex B - List of Creditors Claims
Annex C - Preliminary Restructuring Term Sheet