Automotores Gildemeister SpA – Leading Latin American Automotive Retail Group Files Prepackaged Chapter 11 with $567mn of Indebtedness as COVID, Declining Consumer Confidence & Weaker Peso Shrink Market and Leave Debt Servicing Impossible

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April 12, 2021 – Privately held Automotores Gildemeister SpA and 12 affiliated Debtors (“Automotores” or the “Debtors”) filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of New York, lead case number 21-10685. The Debtors, a leading :Latin American automotive retailer (weighted towards Chile and Hyundai) are represented by Jane VanLare of Cleary Gottlieb Steen & Hamilton LLP. Further board-authorized engagements include (i) Rothschild & Co as investment banker, (ii) FTI  Consulting Canada ULC as  financial advisors and (iii) Prime Clerk as claims agent. 

The Debtors’ lead petition notes between 200 and 1,000 creditors; estimated assets between $500.0mn and $1.0bn and estimated liabilities between $500.0mn and $1.0bn (Debtors note $566.7mn of consolidated indebtness). Documents filed with the Court list the Debtors’ five largest unsecured creditors as (i) Bank of New York Mellon (as Trustee for $521.1mn of 7.50% Senior Secured Notes due 2025, $111.8mn of which (after deduction for value of collateral) is considered unsecured, (ii) Bank of New York Mellon (as Trustee for $23.2mn of 8.25% of Senior Unsecured Notes due 2021), (iii) Bank of New York Mellon (as Trustee for $9.9mn of 7.50% Senior Unsecured Notes due 2021, (iv) Bank of New York Mellon (as Trustee for $2.7mn of 6.750% Senior Unsecured Notes due 2023) and (v) Hyundai Corporation ($2.5mn inventory financing claim).

Highlights

  • Leading Latin American (Chilean-centric) automotive retailer files prepackaged Plan with $566.7mn of consolidated indebtness ($545.0mn bond debt)
  • RSA currently has 79.6% suppprt of key noteholder group (7.5% Notes due 2025)
  • Plan aims for $200.0mn of debt reduction
  • Certain RSA parties to provide of $23.6mn of DIP financing
  • Debtors cite unsustainable capital structure ($100.0mn of interest over next 3.5 years) and shrinking markets (Chilean market down by 31% over 2020 as consumer confidence plummeted) as exacerbated by weaker Chilean peso (debt servicing requiring conversion to US$) and COVID-19
  • RSA Milestones include Plan confirmation within 50 days of petition date and Plan effectiveness 15 days thereafter

In an April 10th press release Automotores advised that it had: “commenced solicitation of its previously announced pre-packaged chapter 11 plan of reorganization (the 'Plan'), which seeks to deleverage the Company's balance sheet by approximately $200 million while minimizing any impact on its day-to-day operations. 

AG previously entered into a restructuring support agreement (the 'RSA') with holders of approximately 72.5 percent of the principal amount outstanding of the company's secured notes (collectively, the 'Consenting Noteholders'), under which, subject to the terms and conditions set forth therein, they will support the Plan, which will implement the proposed restructuring."

Prepackaged Plan and RSA Summary

The Disclosure Statement provides: ‘… after extensive, good faith negotiations with certain of the holders of the 7.5% Notes due 2025, the Plan embodies a settlement among the Debtors and their key creditor constituencies on a consensual transaction that will reduce the Debtors’ debt service obligations and position the Debtors for continued operations. 

To evidence their support of the Debtors’ restructuring plan, Senior Secured Noteholders representing approximately 72.5% of the aggregate outstanding principal amount of the 7.5% Notes due 2025 (the ‘Consenting Noteholders’) have executed the Restructuring and Plan Support Agreement, dated as of March 31, 2021 (the ‘RSA’), which provides for the implementation of the restructuring through an expedited chapter 11 process and commits the Consenting Noteholders and the Debtors to support the Plan subject to the terms and conditions of the RSA. Additional holders of the 7.5% Notes due 2025, who, in the aggregate hold approximately $36,388,618 in principal amount, or approximately 7.1% of the outstanding 7.5% Notes due 2025, subsequently executed joinder agreements to the RSA (the ‘Joining Consenting Noteholders’). Together, the Ad Hoc Group of Consenting Noteholders and the Joining Consenting Noteholders hold approximately 79.6% of the outstanding 7.5% Notes due 2025

As part of their obligations under the RSA, certain of the Consenting Noteholders (the ‘DIP Lenders’) have agreed to provide post-petition financing to the Debtors, subject to the terms and conditions set forth in the RSA, the DIP Term Sheet, and the definitive documentation related to the DIP Credit Facility. 

After giving effect to the following transactions contemplated by the RSA and the Plan, the Debtors will emerge from chapter 11 appropriately capitalized to support their emergence and going-forward business needs. 

  • On the Plan Effective Date, the Reorganized Debtors shall issue: (i) a senior tranche of secured notes (the ‘New Senior Tranche Secured Notes’), (ii) a junior tranche of secured notes (the ‘New Junior Tranche Secured Notes’, and together with the New Senior Tranche Secured Notes, the ‘New Secured Notes’), and (iii) a subordinated tranche of unsecured notes (the ‘New Subordinated Notes’ and together with the New Secured Notes, the ‘New Notes’), which shall have the terms indicated in the RSA and as described in Section VII.A(i). On the Plan Effective Date, the New Notes will be distributed to the holders of DIP Claims, 7.5% Notes due 2025 Secured Claims, and Unsecured Notes and Related Party Claims in accordance with the Plan. 
  • On or prior to the Plan Effective Date, a newly formed holding company structured as a sociedad por accionesunder the laws of Chile shall be formed (‘Chile Holdco’ and together with the Reorganized Debtors, the ‘Reorganized Business’). Upon implementation of the Restructuring Transactions on the Plan Effective Date, Chile Holdco shall hold all of the equity interests in Reorganized Gildemeister (the ‘Reorganized Gildemeister Common Stock’) from and after the Plan Effective Date. 
  • On the Plan Effective Date, Chile Holdco shall issue (i) a single class of common equity interests with 100% economic and voting rights (the ‘Chile Holdco Stock’) and having a paid in capital value of $44.3 million, and (ii) bonds in an aggregate principal amount of $132.8 million (the ‘Chile Holdco Bonds’, and together with the Chile Holdco Stock, the ‘Chile Holdco Securities’). On the Plan Effective Date, the Chile Holdco Securities will be distributed to USA Holdco in accordance with the Plan. 
  • On or prior to the Plan Effective Date, a newly formed holding company structured as a limited liability company under the laws of Delaware shall be formed (‘USA Holdco’), which, due to its ownership of Chile Holdco, will indirectly hold 100% of the equity interests in the Reorganized Business from and after the Plan Effective Date. On the Plan Effective Date, USA Holdco shall issue a single class of limited liability company units with 100% economic and voting rights (the ‘USA Holdco LLC Units’) to the holders of the 7.5% Notes due 2025 Secured Claims in accordance with the Plan. 

On the Plan Effective Date: 

  • Each holder of an Allowed DIP Claim (including all principal, accrued and unpaid interest, fees and expenses and non-contingent indemnity claims) shall have their DIP Expenses paid in full in Cash and, with respect to the remaining DIP Claims, at the Reorganized Debtors’ option, the Reorganized Debtors shall pay such DIP Claims (i) dollar for dollar with New Senior Tranche Secured Notes, or (ii) full Cash payment of the then unpaid balance of the DIP Claims. •Except as otherwise expressly provided in the Plan, each holder of an Allowed Administrative Claim shall receive payment in full in cash. 
  • Each holder of an Allowed Priority Tax Claim shall receive treatment in a manner consistent with section 1129(a)(9)(C) of the Bankruptcy Code. 
  • Each holder of an Allowed Other Secured Claim shall receive, at the Debtors’ option subject to the consent of the Required Consenting Noteholders: (a) payment in full in cash; (b) the collateral securing its Allowed Other Secured Claim; (c) Reinstatement of its Allowed Other Secured Claim; or (d) such other treatment rendering its Allowed Other Secured Claim Unimpaired in accordance with section 1124 of the Bankruptcy Code. 
  • Each holder of an Allowed Other Priority Claim shall receive treatment in a manner consistent with section 1129(a)(9) of the Bankruptcy Code. •Each holder of an Allowed Prepetition Bank Financing Claim shall have their claim Reinstated. 
  • The 7.5% Notes due 2025 Secured Claims shall be Allowed in an amount of $409,300,000. On the Plan Effective Date (or as soon as practicable thereafter), each holder of an Allowed 7.5% Notes due 2025 Secured Claim shall receive: 
    • If such holder is not a Cash-Out Electing Holder (a ‘Non-Cash-Out Electing Holder’), shall receive with respect to such holder’s Allowed 7.5% Notes due 2025 Secured Claims (i) $0.56046 in principal amount of New Junior Tranche Secured Notes for each $1.00 of Allowed 7.5% Notes due 2025 Secured Claims held by such holder, (ii) $0.19789 in principal amount of New Subordinated Notes for each $1.00 of Allowed 7.5% Notes due 2025 Secured Claims held by such holder, and (iii) its Pro Rata Share (based on the proportion that such Non-Cash-Out Electing Holder’s Allowed 7.5% Notes due 2025 Secured Claims bears to the sum of all Allowed 7.5% Notes due 2025 Secured Claims held by all Non-Cash-Out Electing Holders) of 100.0% of the USA Holdco LLC Units3; or 
    • If such holder of an Allowed 7.5% Notes due 2025 Secured Claim has affirmatively made a Plan Election on its Letter of Transmittal to receive a Cash-Out Distribution on its Ballot (a ‘Cash-Out Electing Holder’), shall receive with respect to such holder’s Allowed 7.5% Notes due 2025 Secured Claims Cash in an aggregate amount equal to 18.6833% of such holder’s Allowed 7.5% Notes due 2025 Secured Claim (a ‘Cash-Out Distribution’) and such holder shall be deemed to have waived any distribution under the Plan under Class 5 on account of its Allowed 7.5% Notes due 2025 Unsecured Deficiency Claims. 
  • The Unsecured Notes and Related Party Claims shall be Allowed in the following amounts: (i) $111,796,081 of 7.5% Notes due 2025 Unsecured Deficiency Claims, (ii) $9,858,106 of 7.5% Notes due 2021 Claims, (iii) 3Due to its ownership of Chile Holdco, USA Holdco will indirectly hold 100% of the equity interests of the Reorganized Debtors from and after the Plan Effective Date. 
  • $23,205,373 of 8.25% Notes due 2021 Claims, and (iv) $2,664,771 of 6.75% Notes due 2023 Claims, which, in each case, for the Claims described in sub-clauses (ii) through (iv) includes the aggregate principal amount of such Claims and any accrued and unpaid interest through the Petition Date, (v) the Minvest Loan Claim shall be allowed in the amount of $1,643,500, and (vi) the Share Purchase Agreement Claim shall be allowed in the amount of $300,000. On the Plan Effective Date (or as soon as practicable thereafter), in full and final satisfaction, settlement, release, and discharge of and exchange for each Allowed Unsecured Notes and Related Party Claim, each holder of an Allowed Unsecured Notes and Related Party Claim shall receive $0.20071 in principal amount of the New Subordinated Notes for each $1.00 of Unsecured Notes and Related Party Claims held by such holder. 
  • Each holder of an Allowed General Unsecured Claim shall be, at the option of the applicable Debtor or Reorganized Debtor, (a) Reinstated or (b) paid in full in cash. 
  • Each holder of an Allowed Intercompany Claim shall have its Claim (a) Reinstated or (b) cancelled, released, and extinguished and without any distribution, in each case, at the Debtors’ election subject to the consent of the Required Consenting Noteholders. 
  • Each holder of an Existing Equity Interest other than in Gildemeister shall have such Interest (a) Reinstated or (b) cancelled, released, and extinguished and without any distribution, in each case, at the Debtors’ election with the consent of the Required Consenting Noteholders and to the extent permitted under local law. 
  • Each Existing Equity Interest in Gildemeister, including, without limitation, each Existing Preferred Equity Interest in Gildemeister, each Existing Common Equity Interest in Gildemeister, and each Existing Series A Warrant and Existing Series B Warrant in Gildemeister shall be redeemed, cancelled, and released

The following is a summary of classes, claims, voting rights and expected recoveries (defined terms are as defined in the Plan and/or Disclosure Statement, see also the recovery analysis and liquidation analysis below):

  • Class 1 (“Other Secured Claims”) is unimpaired, deemed to accept and not entitled to vote on the Plan. The estimated recovery is 100%.
  • Class 2 (“Other Priority Claims”) is unimpaired, deemed to accept and not entitled to vote on the Plan. The estimated recovery is 100%.
  • Class 3 (“Prepetition Bank Financing Claims”) is unimpaired, deemed to accept and not entitled to vote on the Plan. The estimated recovery is 100%.
  • Class 4 (“7.5% Notes due 2025 Secured Claims”) is impaired and entitled to vote on the Plan. The aggregate amount of claims is $409,300,000 and the estimated recovery is 96.9% – 114.0%. On the Plan Effective Date (or as soon as practicable thereafter), in full and final satisfaction, settlement, release, and discharge of and exchange for each Allowed 7.5% Notes due 2025 Secured Claim, each holder of an Allowed 7.5% Notes due 2025 Secured Claim:
  1. If such holder is not a Cash-Out Electing Holder (a “Non-Cash-Out Electing Holder”), shall receive with respect to such holder’s Allowed 7.5% Notes due 2025 Secured Claims (i) $0.56046 in principal amount of New Junior Tranche Secured Notes for each $1.00 of Allowed 7.5% Notes due 2025 Secured Claims held by such holder, (ii) $0.19789 in principal amount of New Subordinated Notes for each $1.00 of Allowed 7.5% Notes due 2025 Secured Claims held by such holder, and (iii) its Pro Rata Share (based on the proportion that such Non-Cash-Out Electing Holder’s Allowed 7.5% Notes due 2025 Secured Claims bears to the sum of all Allowed 7.5% Notes due 2025 Secured Claims held by all Non-Cash-Out Electing Holders) of 100.0% of the USA Holdco LLC Units, or
  2. if such holder of an Allowed 7.5% Notes due 2025 Secured Claim has affirmatively made a Plan Election on its Letter of Transmittal to receive a Cash-Out Distribution on its Ballot (a “Cash-Out Electing Holder”), shall receive with respect to such holder’s Allowed 7.5% Notes due 2025 Secured Claims Cash in an aggregate amount equal to 18.6833% of such holder’s Allowed 7.5% Notes due 2025 Secured Claim (a “Cash-Out Distribution”) and such holder shall be deemed to have waived any distribution under the Plan under Class 5 on account of its Allowed 7.5% Notes due 2025 Unsecured Deficiency Claims.
  • Class 5 (“Unsecured Notes and Related Party Claims”) is impaired and entitled to vote on the Plan. The aggregate amount of claims is (i) $111,796,081 million of 7.5% Notes due 2025 Unsecured Deficiency Claims, (ii) $9,858,106 of 7.5% Notes due 2021 Claims, (iii) $23,205,373 of 8.25% Notes due 2021 Claims, (iv) $2,664,771 of 6.75% Notes due 2023 Claims, plus in each case for the Claims described in sub-clauses (ii) through (iv) any accrued and unpaid interest on the respective series of notes through the Petition Date. The Minvest Loan Claim shall be Allowed in the amount of $1,643,500, plus accrued and unpaid interest, if any, and the Share Purchase Agreement Claim shall be Allowed in the amount of $300,000, and the estimated recovery is 14.7% – 18.4% . On the Plan Effective Date (or as soon as practicable thereafter), in full and final satisfaction, settlement, release, and discharge of and exchange for each Allowed Unsecured Notes and Related Party Claim, each holder of an Allowed Unsecured Notes and Related Party Claim shall receive $0.20071 in principal amount of the New Subordinated Notes for each $1.00 of Unsecured Notes and Related Party Claims held by such holder.
  • Class 6 (“General Unsecured Claims”) is unimpaired, deemed to accept and not entitled to vote on the Plan. The estimated recovery is 100%.
  • Class7 (“Intercompany Claims”) is unimpaired/impaired, deemed to accept/reject and not entitled to vote on the Plan. The estimated recovery is 100%.
  • Class 8 (“Existing Equity Interests Other Than in Gildemeister”) is unimpaired/impaired, deemed to accept/reject and not entitled to vote on the Plan. The estimated recovery is 100%.
  • Class 9 (“Existing Equity Interests in Gildemeister”) is impaired, deemed to reject and not entitled to vote on the Plan. The estimated recovery is N/A.

DIP Financing

The Debtors have obtained commitments for $23.6mn of senior secured, priming, super-priority, debtor-in-possession ("DIP") financing from certain RSA parties (ie the 7.5% 2025 noreholders). Acquiom Agency Services LLC is to serve as as DIP agent and TMF Group New York, LLC as collateral agent.

Events Leading to the Chapter 11 Filing

The Debtors' Disclosure Statement details an increasingly unsustainable capital structure, with a crushing $100.0mn wave of debt servicing obligations arriving over the next 3.5 years; and this at a time when the ability to service debt weakened by lower consumer confidence (driven by COVID-19 and a weak Chilean peso) and the resulting dramatic reduction in sales volumes. The operational and cashflow issues only made worse by the weak peso's impact on the Debtors' ability to service largely US$-denominated debt. 

The Disclosure Statement provides: “A restructuring of the Debtors’ balance sheet is necessary in order for the Debtors to be able to meet their financial obligations over the long-term. Since the issuance of the 7.5% Notes due 2025, the Debtors’ revenues have not grown to a level necessary to support the Debtors’ existing capital structure. The Debtors have struggled financially due to a number of factors, including the COVID-19 pandemic and macroeconomic conditions, which have resulted in decreased consumer confidence in the markets in which the Debtors operate.

As a result of these factors, revenue is substantially lower than expected at the time of the issuance of the 7.5% Notes due 2025. The Debtors do not have the capacity to execute on their business strategy or continue paying their debt without the implementation and Consummation of the Plan.

The Debtors’ current debt service obligations place significant strain on the Debtors’ available cash flows.  The Debtors have approximately US$566,690,000 in total debt outstanding, of which approximately US$35 million will become due between the Petition Date and the end of 2023.  At the same time, the Debtors are facing approximately US$100 million in scheduled cash interest payments over the next 3.5 years, putting severe pressure on the Debtors’ ability to generate sufficient cash to service such debt obligations. Absent a substantial deleveraging of the Debtors’ balance sheet and elimination of a substantial amount of obligations in respect of near- and medium-term debt, the Debtors will not be able to continue to service their debt or conduct their business in the ordinary course.

On competitive, macro-economic and and operational factors, the Debtors add: "Prior to the pandemic, increased competition and market size challenged the Debtors’ profitability. Although the Debtors continue to maintain high levels of market share in their key market of Chile, this market was already suffering declines as a result of macroeconomic and other conditions prior to the pandemic, which resulted in the decrease of unit sales, revenues and EBITDA. The Debtors believe that overall consumer confidence in this market has decreased substantially, which has adversely affected demand for vehicles. In addition, Chile has recently experienced substantial depreciations in its currency relative to the U.S. dollar. The Chilean peso has also depreciated from Ch$694.77 per US$1.00 as of December 31, 2018 to an average of Ch$803.61 per US$1.00 during the 9 month period ending September 30, 2019, with a recent uptick to Ch$710.95 per US$1.00 as of December 31, 2020. Because the selling prices of the Debtors’ cars are either denominated in U.S. dollars (in the case of Uruguay) or are significantly influenced by the U.S. dollar denominated prices charged by the Debtors’ OEMs (in the case of Chile), significant depreciations have decreased the purchasing power of consumers, and therefore have decreased demand for the Debtors’ products. In addition, significant depreciation also impacts gross margins as the company may not be able to pass on the depreciation fully to the end consumer (in the case of Chile).

As of December 31, 2020, the market for passenger and light commercial vehicles in Chile shrank by 31% as compared to December 31, 2019, from 372,983 vehicles to 259,043 vehicles. The Debtors’ sales of passenger and light commercial vehicles in Chile decreased 32% from 33,444 vehicles in 2019 to 22,669 vehicles in 2020.

Between 2019 and 2020, the U.S. dollar value of the Debtors’ revenues decreased by 58%, from US$1,069.7 million in 2019 to US$677.3 million in 2020. In addition, the Debtors’ revenues stated in Chilean pesos decreased by 29% from Ch$755.420 million in 2019 to Ch$537.139 million in 2020.”

Prepetition Indebtedness

As of December 31, 2020, the Debtors had outstanding debt in the aggregate principal amount of approximately US$566,690,000 consisting primarily of approximately US$509,806,002 in outstanding principal amount under their 7.5% Notes due 2025.

2019 Exchange Offer

The Debtors' slightly unusual mix of note maturities, secured vs unsecured status and note quantum largely resulted in part from a 2019 exchange offer. The Disclosure Statement provides: :On September 30, 2019, in order to extend the maturity of Gildemeister’s then-existing senior debt, Gildemeister commenced an offer to exchange (the 'Exchange Offer') any and all of the outstanding 7.5% Notes due 2021, 8.25% Notes due 2021 and 6.75% Notes due 2023, in exchange for consideration consisting of a combination of newly issued 7.5% Notes due 2025, Series A Warrants and Series B Warrants. The Exchange Offer was consummated on November 7, 2019 and, in total, 98.13% of the outstanding principal amount of 7.5% Notes due 2021 were validly tendered and accepted by Gildemeister for exchange. Pursuant to the Exchange Offer, substantially all of the restrictive covenants and other provisions of the 7.5% Notes due 2021 were eliminated, including all of the collateral securing such notes. Accordingly, following the Exchange Offer, the 7.5% Notes due 2021, which were previously secured by certain of Gildemeister’s then-unencumbered assets, are unsecured."

Stockholders’ Equity and Principla Shareholders

Stockholders’ Equity

Gildemeister’s share capital is composed as follows:

  1. Common Stock (Series A and B): Gildemeister has two classes of common stock, Series A Common Stock, which has voting rights and Series B Common Stock, which does not have voting rights. Other than voting rights, the two classes have identical rights. As of December 31, 2020, Gildemeister’s Series A Common Stock consisted of 1,050,000 fully subscribed and paid shares.
  2. Preferred Stock (Series C and D): Gildemeister also has two classes of preferred stock, Series C Preferred Stock, which has limited voting rights and Series D Preferred Stock, which does not have voting rights. Other than voting rights, the two classes have identical rights. As of December 31, 2020, Gildemeister’s Series C Preferred Stock consisted of 272,500 fully subscribed and paid shares, and its Series D Preferred Stock consisted of 5,304 fully subscribed and paid shares.
  3. Warrants (Series A and B): In addition to common stock and preferred stock, Gildemeister has also issued two series of warrants, Series A Warrants and Series B Warrants, which are convertible into Common Stock of Gildemeister. The outstanding Series A and B Warrants represent, in the aggregate, the right to receive a total of 1,522,472 shares of Series A or B Common Stock. Each Series A Warrant is exercisable for one share of Series A Common Stock at an exercise price of US$0.01 at any time prior to February 1, 2027, and each Series B Warrant is exercisable for one share of Series B Common Stock at an exercise price of US$0.01 at any time prior to February 1, 2027.

As of December 31, 2020, the total stockholders’ equity of Gildemeister was $34,220,000, composed of $340,192,000 in total capital issued and $374,412,000 in total retained earnings and other items.

Principal Shareholders

  • Elliot International LP: 34% of Class C equity interests
  • Global Holdings Enterprises Inc.: 38% of Class D equity interests
  • Maples Trustee Services (Cayman)   Limited: 24% of Class D equity interests
  • Minvest S.A.: 100% of Class A equity interests
  • MMI 110 Investment Holdings Designated Activity Company: 15% of Class C equity interests
  • The Liverpool Limited Partnership: 15% of Class C equity interests 
  • World International Investments Corporation: 38% of Class D equity interests

The following documents were attached to the Debtors’ Disclosure Statement:

  • Exhibit A: Debtors’ Joint Prepackaged Chapter 11 Plan 
  • Exhibit B:  Restructuring and Plan Support Agreement 
  • Exhibit C: Financial Projections 
  • Exhibit D: Liquidation Analysis 
  • Exhibit E: Organizational Chart 
  • Exhibit F: Valuation Analysis

Liquidation Ananlysis and Recovery Analysis (see Exhibit D of Disclosure Statement for notes and higher resolution images)

About the Debtors

The Disclosure Statement provides: "Automotores Gildemeister SpA ('Gildemeister' and together with its Debtor and non-Debtor affiliates, the 'Company') is a privately held company (sociedad por acciones or stock corporation) founded in 1986 as a limited liability company, which was transformed into a sociedad anonima in 1988 and later into a sociedad por acciones in 2016. Minvest S.A., a sociedad anónima organized under the laws of Chile, is the controlling shareholder of Gildemeister and owns 100.0% of the common stock of Gildemeister. Ricardo Lessmann, the President and Chief Executive Officer of Gildemeister, is also a shareholder of Minvest S.A. All of Gildemeister’s direct and indirect subsidiaries are wholly-owned, other than for a nominal share owned by an affiliate of Automotores Gildemeister SpA to comply with Chilean and Peruvian corporate law. Automotores Gildemeister SpA includes the company’s Chilean new and used vehicle sales and aftermarket business. All of Gildemeister’s Chilean subsdiaries are Debtors in these proceedings. Gildemeister´s other direct subsidiaries which are Debtors in these proceedings include Fonedar S.A., Lodinem S.A., and Camur S.A. in Uruguay and Bramont Montadora Industrial e Comercial de Vehiculos S.A. in Brazil. Bramont S.A. was the sole importer of Mahindra in Brazil until 2016.

Gildemeister’s non-Debtor subsidiaries include Automotores Gildemeister Peru S.A., which conducts Gildemeister’s Peruvian vehicle sales. Automotores Gildemeister Peru S.A. has two subsidiaries, Manasa Peru S.A., which has concessions and supply agreements for the importation and distribution of a number of different vehicle brands in Peru, including Volvo Cars Overseas Corporation and Land Rover Exports Ltd., and Motor Mundo S.A., which has concessions and supply agreements for the importation and distribution of a number of vehicle brands in Peru, including Mahindra and Shenyang Brilliance (Jinbei). Other non-Debtor affiliates include Gildemeister Costa Rica S.A. and Inmobiliaria Los Seis CR ILS S.A. in Costa Rica.

Sociedad Comercial de Ecovalor S.A. ('Ecovalor'), Sociedad de Créditos Automotrices S.A. ('Amicar') and Sociedad Comercial e Inmobiliaria Autoshopping S.A. ('Autoshopping') are companies based in Chile, which are 50% joint ventures between Gildemeister and Derco Inversiones.

For operational purposes, the Company has divided its business into two main categories: (i) the vehicle business, the Company’s core activity, which mainly consists of importing, distributing and selling new vehicles (primarily Hyundai), providing maintenance and repair services and selling associated parts, selling used vehicles and brokering insurance and financing services, and (ii) the third-party after-market accessories business, under which the Company sells vehicle accessories, although this business was wound down in 2020."

Corporate Structure Chart

 

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