Mexico glass maker Vitro gets more time on debt

Mexican glass maker Vitro said on Tuesday that banks agreed to hold off on U.S. legal action while they negotiate payment of its defaulted debt.

Credit Suisse, Calyon, Merrill Lynch, Barclays and Citi will give Vitro (VITROA.MX) until April 24 to reach an agreement on payment of money owed as a result of losing derivatives bets, the Mexican company said in a statement.

Monterrey-based Vitro, once a major glassmaker but now struggling with high debt and falling sales, said it expects Deutsche Bank, another counterparty to its derivatives bets, to also agree to hold off on legal action.

Vitro said in January it failed to pay $293 million in obligations related to its derivatives.

Several Mexican companies were caught offguard last October when the global credit crisis threw Mexico´s peso <MXN=> into a free-fall, leading to massive losses in currency derivatives bets that many investors were unaware existed.

Mexican regulators are investigating whether some companies may have broken rules by not clearly informing investors about their derivatives positions.

As well as Vitro, supermarket operator Comercial Mexicana and paper producer Corporacion Durango have defaulted on their obligations.