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RESTRUCTURING - Meeting the Challenge

Jan 19, 2012

Comerci’s $3.2bn Workout

IIn early 2010, almost two years after defaulting on its debt at the height of the 2008 financial crisis, Mexico's third largest supermarket chain, Controladora Comercial Mexicana (CCM), was mired in fruitless talks with creditors.

After losing more than $2.0 billion to bad bets in currency derivatives, the company was struggling to refinance more than $3.2 billion in debt and derivatives claims. It was not until June of 2010 that Comerci, as the company is known, moved to pursue a debt restructuring under a concurso mercantil, using Mexico's relatively untested insolvency law.

In doing so, CCM became the first listed company in Mexican history to file a pre-packaged restructuring, where the debtor and creditors strike an agreement before going to court.

As envisioned,...

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“The crisis has been a setback for reserve diversification."

Jan Dehn, Ashmore Investment Management