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MONTERREY, Mexico, May 16 (Reuters) - Mexico's state-run foreign
trade bank Bancomext said on Tuesday it hopes to restructure debt
repayments with the nation's second biggest sugar producer Grupo
Azucarero Mexico (GAM) over the next two weeks.
GAM last week suspended repayment of $125.9 million in debt,
saying sugar prices barely covered costs.
Mexico's sugar industry has long been in crisis due to low prices
and unpayable debts.
``The GAM case surprised us,'' Bancomext chief Enrique Vilatela
told reporters in the northern industrial city of Monterrey. ``We
are in talks with the company to find a solution,'' he added.
GAM owes about $40 million to Bancomext, $10 million to Mexican
financial group Inverlat and some $70 million to U.S. bond holders.
The firm said on Tuesday it was not in danger of bankruptcy but
sought protection from creditors to give it time to repay in an
orderly fashion while maintaining normal operations. A bankruptcy
judge said GAM had the money but needs to time to pay debt.
Vilatela said debts would be renegotiated with GAM within two
weeks, and that Bancomext and the Finance Ministry are working on a
new financing arrangement. He did not give further details.
GAM is seeking a merger with another Mexican sugar producer and
considering a capitalisation plan to pay creditors.
GAM has five sugar mills in Mexico, with an estimated production
this year of 453,000 tonnes, down from 469,000 tonnes a year ago.
Mexico, the eighth largest sugar producer in the world, is seen
producing 4.8 million tonnes of sugar this year and consuming 4.2
million tonnes.
Mexico's per capita sugar consumption is one of the highest in
the world, at 47 kilos a year, according to the National Sugar and
Alcohol Chamber.
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