Credito Real to File Mexico Wind Down Deal Backed by Holders
Credito Real, a Mexican consumer lender, is planning to file a wind down deal backed by holders of its debt. The company is looking to restructure its debt and reduce its liabilities by about $1.2 billion. The move is part of a larger effort to reduce its debt burden and improve its financial position.
Background of Credito Real
Credito Real is a Mexican consumer lender that provides credit to individuals and small businesses. The company was founded in 2002 and is headquartered in Mexico City. It has operations in Mexico, Guatemala, El Salvador, Honduras, and Nicaragua. Credito Real has a portfolio of over $2 billion in loans and has more than 1.5 million customers.
Credito Real’s Financial Struggles
Credito Real has been struggling financially in recent years. The company has been hit hard by the economic downturn caused by the COVID-19 pandemic. As a result, Credito Real has seen its loan portfolio shrink and its debt burden increase. The company has been unable to meet its debt obligations and has been in default on some of its debt.
Credito Real’s Wind Down Plan
In order to reduce its debt burden and improve its financial position, Credito Real is planning to file a wind down deal backed by holders of its debt. The company is looking to restructure its debt and reduce its liabilities by about $1.2 billion. The plan is to exchange existing debt for new debt with lower interest rates and longer maturities.
Support from Creditors
Credito Real has received support from its creditors for the wind down plan. The company has reached an agreement with a group of creditors that hold more than 50% of its debt. The creditors have agreed to support the plan and have agreed to exchange their existing debt for new debt with lower interest rates and longer maturities.
Benefits of the Wind Down Plan
The wind down plan is expected to provide several benefits to Credito Real. The company will be able to reduce its debt burden and improve its financial position. The plan will also provide the company with more flexibility to pursue new opportunities and expand its operations. Additionally, the plan will provide creditors with more security and better terms on their investments.
Risks of the Wind Down Plan
The wind down plan is not without risks. The company could face difficulties in restructuring its debt and may not be able to reduce its liabilities by the desired amount. Additionally, the plan could lead to a decrease in the value of the company’s assets and could result in losses for creditors.
Conclusion
Credito Real is planning to file a wind down deal backed by holders of its debt. The company is looking to restructure its debt and reduce its liabilities by about $1.2 billion. The plan has received support from creditors and is expected to provide several benefits to Credito Real. However, the plan also carries some risks and could lead to losses for creditors.