Grupo Famsa, S.A.B. de C.V. on June 26, 2020, filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York in order to obtain approval of its prepackaged Chapter 11 plan of reorganization which will permit the Company to complete the refinancing of its outstanding 7.250% senior notes due June 1, 2020 (the “2020 Notes”). The Company received outstanding support from holders of the 2020 Notes voting on its proposed chapter 11 plan, so as to permit Grupo Famsa to confirm the refinancing of the 2020 Notes through the Chapter 11 proceeding. Grupo Famsa intends to seek expeditious approval of the prepackaged Chapter 11 plan of reorganization as quickly as possible.
Grupo Famsa will continue to operate in the ordinary course without any disruption to its business and the valuable relationships that the Company maintains with its customers, suppliers and vendors. Importantly, Grupo Famsa’s prepackaged Chapter 11 of reorganization will not affect any obligations other than the 2020 Notes, and the Company has filed a number of motions with the court that will allow Grupo Famsa to continue to honor its obligations to all of its customers, suppliers and vendors. To that end, the Company anticipates that its current cash on hand, as well as projected positive cash flow from operations, will be sufficient to fund its operations during the short period of time that Grupo Famsa intends to remain in Chapter 11.
Humberto Garza Valdez, CEO of Grupo Famsa, commented, “From the 356 ballots counted, we were pleased to receive the affirmative votes of approximately 96% in principal amount (USD$48.6 million) and more than 98% in number of holders (351) voting on our Chapter 11 plan. This gives us the ability to move forward with the refinancing of the 2020 Notes and proceed with our business as usual (subject to any mandated or necessary closures due to the COVID‐19 outbreak). Furthermore, the Company expects to continue meeting its obligations to its other creditors and employees, who will not be negatively impacted in any way by this process.”
Mr. Garza Valdez added, “I would like to thank our customers, suppliers and creditors for their continued support during this process. We also appreciate the ongoing loyalty and support of our employees, whose dedication and hard work are critical to our success and to the future of the Company. Our management team is committed to making this refinancing successful and we look forward to an effective and speedy resolution of the chapter 11 proceeding.”
The Company filed its voluntary Chapter 11 petition in the United States Bankruptcy Court for the Southern District of New York. The main case has been assigned case number 20‐11505.
Grupo Famsa is a leading Mexican company in the retail sector with more than 49 years of experience in the market, focused on meeting a number of consumption and basic financial services needs of households, through the deployment of an integrated and flexible business platform, comprised of three business units: Famsa Mexico, responsible for operating 379 retail stores in Mexico. Banco Famsa, Offers since 2007 a wide complementary portfolio of financial services to our retail customers and to SMEs as well. Famsa USA, operates a network of 22 retail stores in the United States, oriented to serve the growing Hispanic community. Grupo Famsa became a publicly traded company in 2006, with its stock listed on the Mexican Stock Exchange (Bolsa Mexicana de Valores – “BMV”) under the ticker symbol “GFAMSA”.