Bloomberg News

IUSA Units File Recovery Plan Giving Noteholders New Debt

June 08, 2011

(Updates with company comment in third paragraph.)

June 8 (Bloomberg) -- Tubo de Pasteje SA, a unit of copper- tubing maker Industrias Unidas SA, filed a restructuring proposal that would give noteholders new debt for 100 percent of the face value of their notes.

Holders of $200 million in 11.5 percent notes would get new Series A notes in the same amount plus interest, which would be secured by the stock of Tubo’s U.S. unit, Cambridge-Lee Holdings Inc., according to the reorganization plan filed yesterday in U.S. Bankruptcy Court in Wilmington, Delaware.

The plan is “designed to maximize recoveries to all creditors and enhance the financial stability” of the reorganized company, Tubo said in court papers.

Tubo entered bankruptcy after defaulting on the 11.5 percent notes following a slowdown in construction and a surge in copper prices, according to court documents. Industrias Unidas, or IUSA, issued the notes, which were secured by a pledge of Cambridge-Lee stock. IUSA, based in Mexico City, didn’t file for bankruptcy.

The 11.5 percent notes traded at 77 cents on the dollar yesterday, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

IUSA bought Cambridge-Lee Industries Inc. in 1993, according to the company’s Web site. Cambridge-Lee acquired Reading Tube Corp. in 1996, making it one of the world’s biggest manufacturers of copper tube for commercial applications such as water supply, air conditioning and refrigeration.

Under the plan, lenders that extended $800,000 of credit would share in the Series A notes, court papers show. Holders of about $148 million in so-called “copper debt notes” and holders of $24.5 million of commercial paper would receive unsecured Series B notes in exchange for their claims.

The company also would reinstate about $41.7 million in debt owed on a Bank of America Corp. loan, as well as about $66.2 million owed on a General Electric Capital Corp. loan.

The case is In re Tubo de Pasteje SA de CV, 09-14353, U.S. Bankruptcy Court, District of Delaware (Wilmington).

--Editors: Stephen Farr, Michael Hytha.

To contact the reporter on this story: Michael Bathon in Wilmington, Delaware, at

To contact the editor responsible for this story: John Pickering at

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