Posadas Group, the largest hotel operator in Mexico, reported on Tuesday that it began a voluntary financial restructuring process under Chapter 11 of the United States legislation, after its business was affected by the coronavirus pandemic.
Posadas, with a portfolio of 185 hotels in a wide range of destinations in the country, said in a statement that it expects the process to conclude in approximately 60 days, during which time it will continue to operate, making use of the cash flow of the business in March.
The restructuring, approved by all the holders of its senior notes due 2022 who cast their vote, will reduce debt service payments and extend the maturity of the papers by 5.5 years, he added.
Today we are taking a last step for Grupo Posadas to achieve a sustainable capital structure, “said José Carlos Azcárraga, director of the company, quoted in the statement.
“This comprehensive debt restructuring was announced two months ago as part of our efforts to maximize our financial flexibility and better manage challenges related to Covid-19,” he added.
Like the rest of the travel industry, Posadas was affected by restrictions on mobility imposed last year to deal with the spread of Covid-19. And while much of the measures have been relaxed, the sector has failed to regain pre-pandemic levels.
In his report of the results of the third quarter, the company, whose shares have not registered movements in the Mexican stock market since October 6, said that the unpaid balance of its papers due 2022 was 393 million dollars, at the end of September.