Guyer & Regules advises Tonosol on debt restructuring

Guyer & Regules and Amorín Abogados have assisted Uruguayan hotel operator Tonosol on the restructuring of a $ 30 million dollars debt package

Guyer & Regules and Amorín Abogados have advised Tonosol S.A., the company that owned and developed the Sheraton Montevideo Hotel and the Aloft Hotel, to restructure its $30 million dollars promissory notes programme issued under Uruguayan law, after the company was acquired by the real estate investment group White Elephant Properties Limited.

On 20 January 2021, the restructuring of the promissory notes became final.

White Elephant Properties Limited purchased 100% of Tonosol and reorganised its business by closing the Sheraton Montevideo Hotel and converting the building into a co-working and flexible office centre, to be operated by Sinergia. As part of this business restructuring, it was also necessary to restructure the promissory notes programme issued by Tonosol.

As a result of the COVID-19 pandemic and the sanitary emergency declared by the Uruguayan government, tourism declined sharply and hotel services remained practically inactive. The impact on the company was negative.

The restructuring mainly involved a modification of the company’s financial covenants and a restructuring of the security package of the notes. The restructuring required the approval of 75% of the noteholders, who approved the restructuring at a meeting of noteholders on 10 December 2020. However, approval was conditional on the acquisition of Tonosol by White Elephant being successful. The Noteholders’ meeting was especially complex due to the fact that Tonosol was also granting a second lien mortgage in favour of the sellers.

Guyer & Regules team was led by partner Nicolás Piaggio (pictured left), assisted by associates José María Nicola (pictured right) and Gimena Areal, along with partner Bernardo Amorín from Amorín Abogados.