Truckmaker Dina to Default, Seek Debt Restructuring

b>Consorcio G. Grupo Dina (DIN) will default on an interest payment of $6.5 million on its 8% convertible subordinated debentures, officials of the troubled Latin American truckmaker announced.

Subsequently, Mexico's stock exchange said it was suspending trading of Dina stock for no more than 60 days.

The payment was originally due Jan. 16, and had a grace period of 30 days.

Gamaliel Garcia, Dina’s chief executive officer, said the company will soon call for a meeting with holders of the debentures in order to start negotiations to restructure the debt.

The Mexican Company’s difficulties became apparent last July when it it missed an interest payment on its commercial paper.

The company’s problems were exacerbated when Freightliner Corp. canceled a contract for the delivery of 9,000 class 7 trucks which Dina had with Western Star Trucks.

Dina had already delivered 600 trucks under the contract.

In response to the cancellation, Dina is suing Western Star Trucks, claiming breach of contract, in the Paris-based International Arbitration Court of the International Chamber of Commerce.