MetroGas files changed reorganization proposal for unsecured creditors

By Caroline Salls

Pittsburgh, May 24 - MetroGas SA has filed a new restatement of its reorganization proposal for unsecured creditors with the National Commercial Court of First Instance No. 26, according to a 6-K filed Thursday with the Securities and Exchange Commission.

The company said the changes to the final proposal made in February mainly involve updating dates for the occurrence of specified events, including interest capitalization dates and deadline computation dates.

In addition, the purchase offer the new notes issuer had to make in the event of a change in stock ownership has been eliminated, the 6-K said.

The company also changed some definitions, including the definition of qualified offer and subordinated debt, where direct or indirect shareholders of a shareholder or affiliated company are also included in the definition of that shareholder or affiliated company.

MetroGas said these timeline changes generally do not exceed six months and are designed to provide an arrangement consistent with the current procedural status of the reorganization proceeding.

February proposal

As previously reported, under the final proposal submitted in February, holders of verified or admitted unsecured claims will receive two classes of notes due Dec. 31, 2018.

Specifically, the company said the unsecured creditors will receive a class A note equal to 53.2% of the claims and a class B note equal to 46.8% of the claims.

In addition, MetroGas said two different series will be issued within each of the classes of new notes in order to identify the unsecured claims with previous notes from the rest of the unsecured claims.

The company will also offer to pay an amount equal to the interest that the new class A notes would have accrued from Jan. 1, 2011 to the issuance date at a rate of 8 7/8%. The principal amount of the new notes will be paid in a single payment at maturity on Dec. 31, 2018.

The new class B notes will only become due and payable from the date when the maturity of the class A new notes is accelerated. The class A notes may be accelerated upon the occurrence of specified events of default or the holders of at least 25% of the new class A series L notes requesting in writing to the company and the trustee to declare the acceleration of the maturity of the new class A notes because of default.

However, the triggering event for issuance of the class B notes must take place on the later of any date within the first year from the issuance date of the new notes or on or before Dec. 31, 2013.

If the triggering event does not occur on or before the deadline, then the new class B notes will be automatically cancelled, and no amount will be owed by MetroGas on those notes.

The company said the new class B notes will only accrue interest if a triggering event occurs within the deadline and from the moment the triggering event occurs.

The interest rate on the class B notes will also be 8 7/8%.

MetroGas is a Buenos Aires gas company.

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