MEXICO CITY — Mexican satellite company Satmex last week filed to dismiss involuntary bankruptcy proceedings initiated before a New York court by a group of U.S. creditors who are owed more than $379 million.
Satmex, 49% owned by Loral Space & Communications, said the restructuring of its more than $520 million in U.S. debt should take place in Mexico, noting its services to the Mexican government are crucial for national security.
The creditors said Friday they would fight to keep proceedings in the United States and said Satmex was reneging on a previous agreement to cede U.S. jurisdiction over the bonds.
Creditors said the company’s move sent “a chilling message to international investors,” according to an emailed statement.
Satmex filed for protection from creditors in Mexico at the end of June, a month after the U.S. creditors had filed to force Chapter 11 proceedings.
Creditors say the Mexican government, which owns 24% of the company and holds sway as its regulator, pressured Satmex to file in Mexico so the government could recover $188 million owed by the company’s major shareholders. That debt would not be considered under U.S. bankruptcy laws.
Mexican judicial authorities on Friday said the “ideal and most likely” possibility was that the U.S. judge would relinquish jurisdiction to the Mexican court. The Federal Judiciary Council said in a statement that domestic and foreign creditors would receive the same treatment in Mexico.
Creditors said restructuring would be faster in U.S. courts and would allow Satmex to launch a satellite that has been warehoused for two years and is needed to make the company profitable. Proceedings in Mexico could take up to a year, and creditors note the company has no alternate proposal to finance the satellite launch.