(Bloomberg) -- The World Health Organization declaration on Friday that the emergency phase of Covid-19 is over was largely symbolic. But, in a strange twist, the decision potentially has ramifications for creditors trying to collect on $400 million of defaulted bonds in Mexico City.
A judge in Mexico City blocked payments on $400 million worth of TV Azteca bonds late last year in a ruling that determined the company was not mandated to honor payments until the WHO officially declared the end of the pandemic. It took months for investors to become aware of the decision — just one of many puzzling twists in the clash between bondholders and Ricardo Salinas Pliego, Mexico's third richest person and TV Azteca owner.
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The two groups have been sparring since 2021 after the company stopped making payments on the bonds maturing in 2024, owned mostly by foreign investors, while still paying other debts in Mexico. At the time, the broadcaster said it was under rising pressure from falling advertising sales during the pandemic, and that it wanted to restructure its debt.
While the WHO's decision sounds like a positive development for creditors, they expect an uphill battle with Salinas to get paid. For starters, it's unclear how quickly the Mexican court will respond to the WHO's declaration. Meanwhile, both sides are deep into litigation: Investors moved to sue in the US, seeking to place the company in Chapter 11, with TV Azteca suing them right back in Mexico.
A Grupo Salinas representative did not immediately respond to a request for comment.
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