Olivera Abogados acted as counsel in the restructuring of CASMU, which is considered probably the most complex insolvency and restructuring procedure carried out in Uruguay.

In 2008, CASMU was the largest and most traditional health services company in Uruguay, with over 20% of market share, and was organized as business unit of the Union of Medical Doctors (SMU). In that critical year the institution was immersed in its deepest financial crisis, was unable to pay its debt of approximately US$ 150 million, and had to face a tense relation with the government, the unions of workers and more than 400 creditors.  

Olivera Abogados designed the strategy for saving CASMU and generating the necessary structures to make it viable. The restructuring included the following steps:

  • The spin-off of CASMU from the Uruguayan Union of MDs and the creation of a new independent company, which received all assets and liabilities related to health services, in 2009.
  • The contribution of capital to CASMU by the MDs who worked in the institution in 2009. Our law firm led the capitalization procedure and obtained the contribution from more than 1.300 doctors, who thus became associates and owners of the new CASMU.
  • The agreement with financial and commercial creditors in 2009, to pay their credits through a period of 15 years with a 30% deduction at present value. Creditors representing 89% of the credits adhered to the agreement. Payment was instrumented with bonds issued by independent trusts created by CASMU.
  • A public offer of bonds for US$ 40 million in 2010. The public offer consisted in the securitization of credits of CASMU against a public health fund (FONASA) and issuance of bonds with the guarantee of a special fund created and financed by the Uruguayan State to this effect. The funds obtained by CASMU were destined to cancel bridge loans and outstanding salaries and to further capitalize the institution.
  • A new negotiation through 2011 and 2012, with former creditors which held private bonds. CASMU offered to purchase those bonds for a price well under their nominal value. 
  • A second public offer of bonds for US$ 35.5 million in 2012 to obtain the funds to purchase the private bonds. The acquisition of private bonds by CASMU at a reduced price implied a new rebate in the credits. 
  • A third public offer of bonds for U$S 7.7 million in 2016 to obtain funds for the construction of a new Hospital. This meant a development of the restructuring strategy started in 2008, which aimed at centralizing the secondary and tertiary health care treatment facilities the institution offers. 

Olivera Abogados designed and executed the strategy of this restructuring procedure and counseled CASMU over the whole process and in the work and negotiations with the government and creditors. Our firm drafted every contract and document needed for every step of the process.

The model designed by Olivera Abogados was later used by other health institutions with financial troubles.

What seemed impossible became a fact and CASMU continues today as a solid and constantly growing institution.