Inversiones Alsacia disclosure statement

8/10/2019 Inversiones Alsacia disclosure statement

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CLEARY GOTTLIEB STEEN & HAMILTON LLP

One Liberty Plaza

New York, New York 10006

Telephone: (212) 225-2000

Facsimile: (212) 225-3999

Lisa M. Schweitzer

Proposed Counsel to the Debtors

and Debtors in Possession

UNITED STATES BANKRUPTCY COURT

FOR THE SOUTHERN DISTRICT OF NEW YORK-------------------------------------------------------------------------

In re

Inversiones Alsacia S.A., et al., 1

Debtors.

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:

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Chapter 11

Case No. 14-_____ (___)

Joint Administration to Be Requested

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DISCLOSURE STATEMENT FOR THE JOINT PREPACKAGED PLAN OF REORGANIZATION OF

INVERSIONES ALSACIA S.A. AND ITS DEBTOR AFFILIATES PURSUANT TO CHAPTER 11 OF THE

BANKRUPTCY CODE

THIS IS A SOLICITATION OF VOTES TO ACCEPT OR REJECT THE PLAN IN ACCORDANCE

WITH SECTION 1125 AND WITHIN THE MEANING OF SECTION 1126 OF THE BANKRUPTCYCODE, 11 U.S.C. 1125, 1126. THIS DISCLOSURE STATEMENT HAS NOT BEEN APPROVED BY

THE BANKRUPTCY COURT. THIS DISCLOSURE STATEMENT WILL BE SUBMITTED TO THE

BANKRUPTCY COURT FOR APPROVAL FOLLOWING SOLICITATION AND THE DEBTORS

FILING FOR RELIEF UNDER CHAPTER 11 OF THE BANKRUPTCY CODE. THE INFORMATION

IN THIS DISCLOSURE STATEMENT IS SUBJECT TO CHANGE. THIS DISCLOSURE STATEMENT

IS NOT AN OFFER TO SELL ANY SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY ANY

SECURITIES.

Dated: September 15, 2014

1 The Debtors, together with each of the Debtors Chilean federal tax identification number, are: Inversiones

Alsacia S.A. [99.577.400-3]; Express de Santiago Uno S.A. [99.577.390-2]; Inversiones Eco Uno S.A. [76.195.710-4]; and Panamerican Investments Ltd. [59.164.900-0]. The location of the corporate headquarters and the service

address for Inversiones Alsacia S.A. and Panamerican Investments Ltd. is: Avenida Santa Clara 555, Huechuraba,

Santiago, Chile. The location of the corporate headquarters and the service address for Express de Santiago Uno

S.A. and Inversiones Eco Uno S.A. is: Camino El Roble 200, Pudahuel, Santiago, Chile.

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Inversiones Alsacia S.A. and certain of its affiliated entities (collectively, the Debtors) are

sending you this document and the accompanying materials (the Disclosure Statement)

because you may be a creditor entitled to vote on the Debtors Joint Prepackaged Chapter

11 Plan (including all exhibits annexed thereto and the Plan Supplement, as it may bemodified, amended or supplemented from time to time, the Plan). 2 The Debtors are

commencing the solicitation of your vote to approve the Plan (the Solicitation) before the

Debtors file voluntary cases under chapter 11 of Title 11 of the United States Code, asamended (the Bankruptcy Code).

The Debtors may file voluntary reorganization cases under chapter 11 of the Bankruptcy

Code to implement the Plan (the Chapter 11 Cases). Because the Chapter 11 Cases have

not yet been commenced, this Disclosure Statement has not been approved by the

Bankruptcy Court as containing adequate information within the meaning of section

1125(a) of the Bankruptcy Code. If the Debtors file the Chapter 11 Cases, they will

promptly seek an order of the Bankruptcy Court (a) approving this Disclosure Statement as

having contained adequate information, (b) approving the solicitation of votes as having

been in compliance with section 1126(b) of the Bankruptcy Code and (c) confirming the

Plan. The Bankruptcy Court may order additional disclosures.

SPECIAL NOTICE REGARDING FEDERAL AND STATE SECURITIES LAWS

Neither this Disclosure Statement nor the Plan has been filed with or reviewed by the

Bankruptcy Court, and the securities to be issued on or after the Effective Date will not have

been the subject of a registration statement filed with the United States Securities and

Exchange Commission (the SEC) under the United States Securities Act of 1933, as

amended (the Securities Act), or any securities regulatory authority of any state under any

state securities law (Blue Sky Laws). The Debtors are relying on section 4(a)(2) and

Regulation S under the Securities Act, and similar Blue Sky Laws provisions, to exempt

from registration under the Securities Act the offer of New Notes to Qualified Holders of

Senior Secured Notes Claims before the filing of the Chapter 11 Cases, including without

limitation in connection with the Solicitation.

After the filing of the Chapter 11 Cases, the Debtors are relying on the exemption from the

Securities Act, and equivalent state law registration requirements, provided by section4(a)(2) and Regulation S under the Securities Act, and similar Blue Sky Laws provisions, to

exempt from registration under the Securities Act and Blue Sky Laws the offer and sale of

New Notes to Qualified Holders under the Plan.

The Plan has not been approved or disapproved by the SEC or any state securities

commission, and neither the SEC nor any state securities commission has passed upon the

accuracy or adequacy of the information contained herein. In addition, the New Notes have

not been approved or disapproved by the SEC, any state securities commission or any other

regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the

merits of the Plan or the accuracy or adequacy of this Disclosure Statement. Any

representation to the contrary is a criminal offense. This Disclosure Statement does not

constitute an offer to sell or the solicitation of an offer to buy securities in any state or

jurisdiction in which such offer or solicitation is not authorized.

2 Unless otherwise defined in this Disclosure Statement, all capitalized terms used, but not otherwisedefined, in this Disclosure Statement shall have the meanings ascribed to them in the Plan.

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SPECIAL NOTICE REGARDING CHILEAN SECURITIES LAWS

The securities to be issued on or after the Effective Date will not be registered with the

Chilean Securities Registry (Registro de Valores) or the Chilean Foreign Securities Registry

(Registro de Valores Extranjeros) maintained by the Chilean Securities and Insurance

Supervisor (Superintendencia de Valores y Seguros or SVS) under Law No. 18.045, as

amended (the Chilean Securities Market law), and accordingly, the New Notes cannot andwill not be offered or sold to persons in Chile except in circumstances which have not

resulted and will not result in a public offering under Chilean law, and in compliance with

Rule (Norma de Carcter General) No. 336, dated June 27, 2012, issued by the SVS. This

Disclosure Statement and the Plan is solely the responsibility of Inversiones Alsacia S.A. and

its affiliated Debtors and has not been reviewed or authorized by the SVS.

The deadline for Holders of Senior Secured Notes Claims to accept or reject the Plan is 5:00 p.m. (PrevailingEastern Time) on October 10, 2014 (the Voting Deadline) unless the Debtors, with the prior consent of theRequisite Consenting Senior Secured Noteholders, and from time to time, extend the Voting Deadline. To becounted, the ballot (the Ballot) or master ballot (the Master Ballot) indicating acceptance or rejection of the Planmust be received by the Debtors notice, claims, and balloting agent (Prime Clerk LLC or the Balloting Agent)

no laterthan the Voting Deadline.

The Debtors cannot assure you that the disclosure statement, including any exhibits thereto, that is ultimately

approved by the Bankruptcy Court in the Chapter 11 Cases (a) will contain all of the terms described in this

Disclosure Statement or (b) will not contain different, additional, or material terms that do not appear in this

Disclosure Statement. The Debtors urge each Holder of a Claim or Interest (i) to read and consider carefully

this entire Disclosure Statement (including the Plan and the matters described under Article XI of this

Disclosure Statement, entitled Risk Factors) and (ii) to consult with its own advisors with respect to

reviewing this Disclosure Statement, the Plan and each of the proposed transactions contemplated thereby

prior to deciding whether to accept or reject the Plan. You should not rely on this Disclosure Statement for

any purpose other than to determine whether to vote to accept or reject the Plan.

If the Plan is confirmed by the Bankruptcy Court and the Effective Date occurs, all Holders of Claims

against, and Holders of Interests in, the Debtors (including, without limitation, those Holders of Claims or

Interests who do not submit Ballots to accept or reject the Plan or who are not entitled to vote on the Plan)

will be bound by the terms of the Plan and the transactions contemplated thereby.

THIS DISCLOSURE STATEMENT CONTAINS PROJECTED FINANCIAL INFORMATION

REGARDING THE REORGANIZED DEBTORS AND CERTAIN OTHER FORWARD-LOOKING

STATEMENTS, ALL OF WHICH ARE BASED ON VARIOUS ESTIMATES AND ASSUMPTIONS.

SUCH INFORMATION AND STATEMENTS ARE SUBJECT TO INHERENT UNCERTAINTIES AND

TO A WIDE VARIETY OF SIGNIFICANT BUSINESS, ECONOMIC, AND COMPETITIVE RISKS,

INCLUDING, AMONG OTHERS, THOSE SUMMARIZED HEREIN. SEE RISK FACTORS.CONSEQUENTLY, ACTUAL EVENTS, CIRCUMSTANCES, EFFECTS, AND RESULTS MAY VARY

SIGNIFICANTLY FROM THOSE INCLUDED IN OR CONTEMPLATED BY THE PROJECTED

FINANCIAL INFORMATION AND OTHER FORWARD-LOOKING STATEMENTS CONTAINED

HEREIN THAT, THEREFORE, ARE NOT NECESSARILY INDICATIVE OF THE FUTURE

FINANCIAL CONDITION OR RESULTS OF OPERATIONS OF THE DEBTORS OR REORGANIZED

DEBTORS AND SHOULD NOT BE REGARDED AS REPRESENTATIONS BY THE DEBTORS, THEIR

ADVISORS, OR ANY OTHER PERSONS THAT THE PROJECTED FINANCIAL CONDITION OR

RESULTS CAN OR WILL BE ACHIEVED. NEITHER THE DEBTORS INDEPENDENT AUDITORS

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NOR ANY OTHER INDEPENDENT ACCOUNTANTS HAVE COMPILED, EXAMINED, OR

PERFORMED ANY PROCEDURES WITH RESPECT TO THE FINANCIAL PROJECTIONS AND THE

LIQUIDATION ANALYSIS CONTAINED HEREIN, NOR HAVE THEY EXPRESSED ANY OPINION OR

ANY OTHER FORM OF ASSURANCE AS TO SUCH INFORMATION OR ITS ACHIEVABILITY, AND

ASSUME NO RESPONSIBILITY FOR, AND DISCLAIM ANY ASSOCIATION WITH THE FINANCIAL

PROJECTIONS OR LIQUIDATION ANALYSIS. THERE CAN BE NO ASSURANCE THAT THE

ASSUMPTIONS UNDERLYING THE FINANCIAL PROJECTIONS WILL PROVE CORRECT OR THATTHE DEBTORS ACTUAL ABILITY TO COVER THEIR FUTURE PRINCIPAL AND CASH INTEREST

PAYMENT OBLIGATIONS WILL NOT DIFFER FROM THE INFORMATION CONTAINED WITHIN

THIS DISCLOSURE STATEMENT. THE DEBTORS AND THEIR ADVISORS DO NOT INTEND TO

UPDATE OR OTHERWISE REVISE ANY INFORMATION DISCLOSED HEREIN TO REFLECT ANY

CHANGES ARISING AFTER THE DATE HEREOF OR TO REFLECT FUTURE EVENTS, EVEN IF

ANY ASSUMPTIONS CONTAINED HEREIN ARE SHOWN TO BE IN ERROR. FORWARD-LOOKING

STATEMENTS ARE PROVIDED IN THIS DISCLOSURE STATEMENT PURSUANT TO THE SAFE

HARBOR ESTABLISHED UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

AND SHOULD BE EVALUATED IN THE CONTEXT OF THE ESTIMATES, ASSUMPTIONS,

UNCERTAINTIES AND RISKS DESCRIBED HEREIN.

Except as set forth elsewhere herein, no person has been authorized by the Debtors in connection with the

Plan or the Solicitation to give any information or to make any representation other than as contained in this

Disclosure Statement and the exhibits attached hereto or referred to herein, and, if given or made, such

information or representation may not be relied upon as having been authorized by the Debtors. This

Disclosure Statement does not constitute an offer to sell or the solicitation of an offer to buy any securities

other than those to which it relates, or an offer to sell or a solicitation of an offer to buy any securities in any

jurisdiction in which, or to any person to whom, it is unlawful to make such offer or solicitation.

The statements contained in this Disclosure Statement are made as of the date hereof, and neither the

delivery of this Disclosure Statement nor any issuance of the securities made pursuant to the Plan will, under

any circumstance, create any implication that the information contained herein is correct at any time

subsequent to the date hereof. Any estimates of claims and interests set forth in this Disclosure Statement

may vary from the amounts of claims or interests ultimately allowed by the Bankruptcy Court.

The summaries of the Plan and the other documents contained in this Disclosure Statement are qualified in

their entirety by reference to the Plan itself, the exhibits thereto and all documents described herein. The

information contained in this Disclosure Statement, including, but not limited to, the information regarding

the history, businesses and operations of the Debtors, the historical and projected financial information of the

Debtors (including the projected results of operations of the Reorganized Debtors) and the liquidation

analysis relating to the Debtors is included herein solely for purposes of soliciting acceptances of the Plan.

Such information, including projected financial information and valuation of the Reorganized Debtors, is not

to be construed as admissions or stipulations but rather as statements made in settlement negotiations.

In this Disclosure Statement, the Debtors rely on and refer to information and statistics regarding the

Debtors industry. The Debtors obtained this market data from independent industry publications or other

publicly available information. Although the Debtors believe that these sources are reliable, the Debtors have

not independently verified and do not guarantee the accuracy and completeness of this information.

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TABLE OF CONTENTS

Page

I. EXECUTIVE SUMMARY ............................................................................ ........................................... .... 1

II. IMPORTANT INFORMATION ABOUT THIS DISCLOSURE STATEMENT ................................... 2

III.

FOREIGN EXCHANGE CONVERSION .................................................................................................. 3

IV. QUESTIONS AND ANSWERS REGARDING THIS DISCLOSURE STATEMENT AND

THE PLAN .................................................................................................................................................... 4

A.

What is chapter 11? ........................................ ........................................... ........................................ 4

B.

Why are the Debtors sending me this Disclosure Statement? ........................................ ................... 4

C.

Am I entitled to vote on the Plan? What will I receive from the Debtors if the Plan isconsummated? ......................................... ........................................... ........................................... .... 4

D.

How do I vote on the plan? ............................................................................................................... 5

E.

Is there anything else that I will need to do to receive the New Notes or the Non-Qualified Distribution? ..................................................................................................................... 6

F.

What happens to my recovery if the Plan is not confirmed, or does not go effective? ..................... 7

G.

Are any regulatory approvals required to consummate the Plan? ..................................................... 7

H.

If the Plan provides that I am entitled to a distribution, do I receive it upon Confirmationor when the Plan goes effective, and what do you mean when you refer toConfirmation, Effective Date and Consummation? ...................................... .......................... 7

I.

Will the Reorganized Debtors be obligated to continue to pay statutory fees as part of thebankruptcy process after the Effective Date? ..................................... ........................................... .... 7

J.

When will the Plan Supplement be Filed and what will it include? ...................................... ............ 8

K.

What are the Debtors Intercompany Claims and Interests? .......................................... ................... 8

L.

How will Claims asserted with respect to rejection damages affect my recovery under thePlan? .......................................... ........................................... ........................................... .................. 8

M.

Will there be releases granted to parties in interest as part of the Plan? ........................................... 8

N.

What is the deadline to vote on the Plan? .......................................... ........................................... .... 9

O.

What is a Confirmation Hearing and will the Bankruptcy Court hold a ConfirmationHearing? ........................................... ........................................... ........................................... ........... 9

P.

What is the effect of the Plan on the Debtors ongoing businesses? ..................................... ............ 9

Q. Do the Debtors recommend voting in favor of the Plan? ........................................ .......................... 9

V.

THE DEBTORS CORPORATE HISTORY, STRUCTURE, AND BUSINESS OVERVIEW ........... 10

A.

The Debtors Prepetition Organizational and Capital Structure ..................................... ................. 10

B.

Summary of the Debtors Businesses and Corporate History ......................................................... 10

C.

Summary of the Debtors Prepetition Capital Structure.......................................... ........................ 14

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VI. EVENTS LEADING TO CHAPTER 11 AND PREPETITION RESTRUCTURING

INITIATIVES ........................................ ........................................... .......................................... ................. 16

A.

New Concession Agreements .................................................... ........................................... .......... 16

B.

Recent Operations .......................................... ........................................... ...................................... 16

(i)

Rising levels of fare evasion ......................................... ........................................... ......... 16

(ii)

Decline in passenger traffic ................................... ........................................... ................ 17

C.

Bus Overhaul Program .......................................... ........................................... ............................... 17

D.

The Debtors Debt Service Obligations .......................................................................................... 17

E.

Impact on Debtors .......................................... ........................................... ...................................... 18

VII. THE PROPOSED REORGANIZATION OF THE DEBTORS ............... ........................................... ... 19

A.

Pre-Solicitation Negotiations .......................................................................................................... 19

B.

Solicitation ...................................................................................................................................... 21

VIII. SUMMARY OF THE PLAN ...................................... .......................................... ...................................... 22

A.

General Basis for the Plan ..................................... ........................................... ............................... 22

B.

Governing Law ............................................................................................................................... 22

C.

Treatment of Unclassified Claims ........................................ ........................................... ................ 22

(i)

Administrative Claims ....................................................................... ............................... 22

(ii)

Professional Claims .......................................................................................................... 23

(iii)

Priority Tax Claims ........................................ ........................................... ........................ 23

(iv)

Payment of Statutory Fees ............................................................................... ................. 23

(v)

Costs and Expenses of Collateral Trustees, Trustee, Paying Agent and Ad HocGroup Advisors ....................................... ........................................... ............................... 23

D.

Classification and Treatment of Claims and Interests ...................................... ............................... 24

(i)

Classification of Claims and Interests ......................................... ...................................... 24

(ii)

Treatment of Classes of Claims and Interests ................................................................. .. 24

E.

Means for Implementation of the Plan ........................................ ........................................... ......... 26

(i)

General Settlement of Claims ...................................... ........................................... .......... 26

(ii)

Subordination .......................................... ........................................... ............................... 26

(iii)

Sources of Cash for Plan Distributions ........................................................................... .. 26

(iv)

Issuance of the New Notes................................................................................................ 27

(v)

Vesting of Assets in the Reorganized Debtors .......................................... ........................ 27

(vi)

Discharge from Notes, Instruments, Certificates and Other Documents .......................... 27

(vii)

Execution of Plan Documents ....................................... ........................................... ......... 28

(viii)

Corporate Action .............................................................................................................. 28

(ix)

New Corporate Governance Documents............................................ ............................... 28

(x)

Effectuating Documents; Further Transactions ............................................... ................. 29

(xi)

Section 1146(a) Exemption .............................................................................................. 29

(xii)

Managers, Directors and Officers ........................................ ........................................... .. 29

(xiii)

Incentive Plans and Employee and Retiree Benefits ........................................ ................. 29

(xiv)

Preservation of Rights of Action....................................................................................... 29

F.

Treatment of Executory Contracts and Unexpired Leases ..................................................... ......... 30

(i)

Assumption of Executory Contracts and Unexpired Leases ............................................. 30

(ii)

Cure of Defaults and Objections to Cure and Assumption ............................................... 30

(iii)

Pre-existing Payment and Other Obligations ..................................... ............................... 31

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(iv)

Rejection Damages Claims and Objections to Rejections ................................................ 31

(v)

Contracts and Leases Entered Into After the Petition Date ..................................... .......... 31

(vi)

Reservation of Rights ....................................................................................................... 32

G.

Provisions Governing Distributions ..................................... ........................................... ................ 32

(i)

Distributions on Account of Claims Allowed as of the Effective Date ............................ 32

(ii)

Special Rules for Distributions to Holders of Disputed Claims....................... ................. 32(iii)

Disbursing Agent ..................................... ........................................... .............................. 32

(iv)

Distributions on Account of Senior Secured Notes Claims .............................................. 33

(v)

Book Entry Transfer: ATOP ......................................... ........................................... ......... 35

(vi)

Letter of Transmittal ............................................................ ........................................... .. 36

(vii)

Delivery of Distributions and Undeliverable or Unclaimed Distributions ........................ 36

(viii)

Claims Paid or Payable by Third Parties .......................................................................... 38

(ix)

Setoffs ....................................... ........................................... ........................................... .. 38

(x)

Allocation Between Principal and Accrued Interest ...................................................... ... 39

H.

Conditions Precedent to Confirmation and Consummation of the Plan ........................................ .. 39

(i)

Conditions Precedent to the Effective Date ..................................................... ................. 39

(ii)

Waiver of Conditions Precedent ......................................... ........................................... ... 40

(iii)

Effect of Non-Occurrence of Conditions to Consummation ........................................... .. 40

I.

Modification, Revocation or Withdrawal of the Plan ..................................................................... 40

(i)

Modification of Plan ............................................................ ........................................... .. 40

(ii)

Revocation or Withdrawal of Plan ....................................... ........................................... .. 40

J.

Effect of Confirmation of the Plan ....................................... ........................................... ................ 40

(i)

Compromise and Settlement of Claims, Interests and Controversies ............................... 40

(ii)

Discharge of Claims and Termination of Interests ................................................. .......... 41

(iii)

Releases by the Debtors ..................................................................... ............................... 41

(iv)

Releases by Releasing Parties ....................................... ........................................... ......... 42

(v)

Exculpation ....................................... ........................................... ..................................... 42

(vi)

Injunction .......................................... ........................................... ..................................... 43

(vii)

Protection Against Discriminatory Treatment .................................................................. 43

(viii)

Indemnification ....................................... ........................................... ............................... 43(ix)

Recoupment ..................................... ........................................... ...................................... 43

(x)

Release of Liens ...................................... ........................................... ............................... 44

(xi)

Reimbursement or Contribution ................................... ........................................... ......... 44

IX.

ANTICIPATED EVENTS OF THE CHAPTER 11 CASES ........................................... ........................ 45

A.

Voluntary Petitions ......................................................................................................................... 45

B.

Expected Timetable of the Chapter 11 Cases ..................................... ........................................... .. 45

C.

First Day Relief ....................................... ........................................... ........................................... .. 45

(i)

Approval of Solicitation Procedures and Scheduling of Confirmation Hearing ............... 45

(ii) Cash Management System ..................................... ........................................... ................ 45(iii)

Cash Collateral.................................................................................................................. 45

(iv)

Wages ............................................................................................................................... 46

(v)

Insurance .......................................... ........................................... ...................................... 46

(vi)

Trade Vendors and Other Unsecured Creditors ................................................................ 46

(vii)

Other Procedural Motions and Professional Retention Applications ................................ 46

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X. PROJECTED FINANCIAL INFORMATION ..................................... ........................................... ......... 47

XI.

RISK FACTORS ......................................................................................................................................... 50

A.

Risks Relating to the Plan Solicitation and Confirmation ....................................... ........................ 50

B.

Risks Related to the Debtors and Reorganized Debtors Businesses ........................................... .. 56

C.

Risks Related to the Plan Securities ..................................... ........................................... ................ 65

D.

Risks Related to the Concession Agreements ......................................................... ........................ 69

E.

Risks Related to Chile ........................................... ........................................... ............................... 73

XII.

CONFIRMATION OF THE PLAN ........................................ ........................................... ........................ 76

A.

Requirements for Confirmation of the Plan .................................................................................... 76

B.

Best Interests of Creditors/Liquidation Analysis ............................... ........................................... .. 76

C.

Feasibility ......................................... ........................................... ........................................... ......... 76

D.

Acceptance by Impaired Class .................................................... ........................................... ......... 76

XIII.

ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE PLAN ....................... 78

A.

Liquidation Under Chapter 7 .......................................................................................................... 78

B.

Alternative Plan(s) of Reorganization ......................................... ........................................... ......... 78

C.

Dismissal of the Debtors Chapter 11 Cases ...................................... ........................................... .. 78

XIV. CERTAIN SECURITIES LAW MATTERS .............................................. ........................................... ... 79

A.

Plan Securities ......................................... ........................................... ........................................... .. 79

B.

Issuance and Resale of Plan Securities under the Plan ...................... ........................................... .. 79

(i)

Exemptions from Registration Requirements of the Securities Act and StateBlue Sky Laws ........................................ ........................................... ............................... 79

(ii)

Resales of Plan Securities; Definition of Underwriter ...................................... ................ 79

XV. CERTAIN CHILEAN AND UNITED STATES FEDERAL INCOME TAX

CONSEQUENCES OF THE PLAN ............................................................. ........................................... .. 81

A.

Introduction ...................................... ........................................... ........................................... ......... 81

B.

Certain U.S. Federal Income Tax Consequences of the Plan to the Debtors ........................ .......... 81

C.

Certain Chilean Income Tax Consequences of the Plan to Holders of Allowed Claims ................. 81

(i)

Taxation of Interest and Principal ........................................ ........................................... .. 82

(ii)

Capitalized Interest .............................................................. ........................................... .. 82

(iii)

Gross-Up of Interest Withholding .................................................................................... 82

(iv)

Taxation of Payments of Principal and Dispositions of the New Notes ........................... 82

(v)

Taxation of Exchange of Senior Secured Notes Claims for New Notes ........................... 82

(vi)

Transfer and Other Taxes ................................................................................................. 83

D.

Certain U.S. Federal Income Tax Consequences of the Plan to Holders of AllowedClaims ............................................................................................................................................. 83

(i)

Consequences to U.S. Holders of Senior Secured Notes .................................................. 83

(ii)

Accrued Interest ...................................... ........................................... ............................... 85

(iii)

Foreign Tax Credits .................................................................... ...................................... 85

(iv)

Stated Interest and Additional Amounts on the New Notes.................................... .......... 85

(v)

Issue Price ......................................... ........................................... ..................................... 86

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(vi)

Original Issue Discount .................................................................................................... 86

(vii)

Market Discount ............................................................................................................... 87

(viii)

Amortizable Bond Premium ................................................ ........................................... .. 87

(ix)

Sale, Exchange, or Other Taxable Disposition of New Notes .......................................... 87

(x)

Withholding and Reporting .............................................................................................. 88

(xi)

Medicare Tax ........................................... ........................................... .............................. 88

XVI. REGULATORY APPROVALS REQUIRED TO APPROVE THIS TRANSACTION ....................... 89

XVII.

SOLICITATION AND VOTING PROCEDURES ..................................... ........................................... .. 90

A.

The Solicitation Package ....................................... ........................................... ............................... 90

B.

Voting Deadline .............................................................................................................................. 90

C.

Voting Instructions ......................................... ........................................... ...................................... 90

(i)

Note to Holders of Claims in Classes 1A-4A. .................................................................. 91

D.

Voting Tabulation ........................................................................................................................... 93

XVIII.

RECOMMENDATION .............................................................................................................................. 95

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EXHIBITS

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 Description of the New Notes

EXHIBIT F Historical Financial Information3

THE DEBTORS HEREBY ADOPT AND INCORPORATE EACH

EXHIBIT ATTACHED TO THIS DISCLOSURE STATEMENT

BY REFERENCE AS THOUGH FULLY SET FORTH HEREIN

3 In addition to the historical financial information provided in Exhibit E to this Disclosure Statement herein, theDebtors may continue to publish their financial information on their respective websites, www.exps1.cl orwww.alsacia.cl, as well as on the website of the SVS, www.svs.cl. The Debtors have previously publishedinformation related to their restructuring on their websites under the heading Inversionistas Comunicados y

Noticias. Information on the Debtors websites and the website of the SVS is not incorporated by reference into

this Disclosure Statement.

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I. EXECUTIVE SUMMARY

The Debtors submit this Disclosure Statement pursuant to section 1125 of the Bankruptcy Code to certainHolders of Claims in connection with the solicitation of acceptances of the Plan. A copy of the Plan is attachedhereto as Exhibit A. The Plan constitutes a separate chapter 11 plan for each Debtor unless otherwise provided forin the Plan. Except for the Claims addressed in Article II of the Plan, all Claims and Interests are placed in Classes

for each of the Debtors.

As of March 31, 2014, the Debtors had outstanding debt in the aggregate principal amount ofapproximately US$386.2 million, consisting primarily of approximately US$347.3 million in outstanding principal

amount under their 8.0% senior secured notes due 2018 (the Senior Secured Notes).

The Debtors are very pleased to report that after extensive, good faith negotiations with certain of theSenior Secured Noteholders, the Plan embodies a settlement among the Debtors and their key creditor constituencieson a consensual transaction that will reduce the Debtors debt service obligations and position the Debtors forcontinued operations through the issuance of New Notes to the Qualified Holders, the payment of the Non-QualifiedHolder Distribution to Non-Qualified Holders and the payment of Cash to Holders of General Unsecured Claims asoutlined below. To evidence their support of the Debtors restructuring plan, Senior Secured Noteholdersrepresenting approximately 62.7% of the aggregate outstanding principal amount of the Senior Secured Notes (theConsenting Senior Secured Noteholders) have executed the Restructuring and Plan Support Agreement, dated as

of August 31, 2014 (as amended by the first amendment, effective as of September, 15, 2014, the RPSA), whichprovides for the implementation of the restructuring through an expedited chapter 11 process and commits theConsenting Senior Secured Noteholders, the Debtors and Global Public Services S.A., Carlos Mario Rios Velillaand Francisco Javier Rios Velilla, in each case in their capacities as direct or indirect shareholders of the Debtors, tosupport the Plan under the terms and conditions of the RPSA. Specifically, after giving effect to the followingtransactions contemplated by the RPSA and the Plan, the Debtors will emerge from chapter 11 appropriately

capitalized to support their emergence and going-forward business needs.

Qualified Holders of the Senior Secured Notes Claims will receive their Pro Rata share of the NewNotes and Non-Qualified Holders will receive the Non-Qualified Holder Distribution.

Other Secured Claims, including any and all Claims arising under or in connection with the BusTerminal Loan, will be Unimpaired, and each Holder of an Allowed Other Secured Claim will, atthe election of the Reorganized Debtors, (i) have the legal, equitable and contractual rights of suchHolder Reinstated or (ii) receive, at the option of the Debtors, subject to the consent of theRequisite Consenting Senior Secured Noteholders, which consent shall not be unreasonablywithheld, (A) Cash in an amount equal to such Allowed Other Secured Claim, (B) the property ofthe Debtors that constitutes Collateral (as defined in the Description of the New Notes attachedhereto as Exhibit E) securing such Allowed Other Secured Claim, or (C) other treatment thatrenders its Allowed Other Secured Claim Unimpaired.

The General Unsecured Claims will be Unimpaired and in exchange for full and final satisfaction,settlement, release and discharge of each General Unsecured Claim, each Holder of such AllowedGeneral Unsecured Claim will receive Cash in an amount equal to such Allowed GeneralUnsecured Claim upon the later of the Effective Date or in the ordinary course of business inaccordance with the terms of the particular transaction giving rise to such Allowed GeneralUnsecured Claim. Paying the general unsecured creditors in the ordinary course of business will

minimize any disruption to the Debtors businesses, will help the Debtors maintain relationshipswith their trade creditors, will maximize the value of the Debtors estates and will allow for asmooth expeditious reorganization in these Chapter 11 Cases.

Intercompany Claims will be Unimpaired and, at the election of the Reorganized Debtors, subjectto the prior written consent of the Requisite Consenting Senior Secured Noteholders (whichconsent shall not be unreasonably withheld), either released, waived and discharged as of theEffective Date, contributed to the capital of the obligor Entity, dividended or remain Unimpaired,

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as may be agreed to by the applicable Reorganized Debtor and the Holder of such IntercompanyClaim, subject to the requirements of and restrictions in the New Notes Indenture, if any.

All Interests will be Reinstated.

THE DEBTORS BELIEVE THAT THE COMPROMISE CONTEMPLATED UNDER THE PLAN

IS FAIR AND EQUITABLE, WILL MAXIMIZE THE VALUE OF THE DEBTORS ESTATES ANDPROVIDES THE BEST RECOVERY TO HOLDERS OF CLAIMS. AT THIS TIME, THE DEBTORS

BELIEVE THIS IS THE BEST AVAILABLE ALTERNATIVE FOR COMPLETING THESE CHAPTER 11

CASES. THE DEBTORS STRONGLY RECOMMEND THAT YOU VOTE TO ACCEPT THE PLAN.

II. IMPORTANT INFORMATION ABOUT THIS DISCLOSURE STATEMENT

This Disclosure Statement provides information regarding the Plan. The Debtors believe that the Plan is in

the best interests of all creditors and urge all Holders of Claims entitled to vote to vote in favor of the Plan.

Unless the context requires otherwise, reference to we, our, and us are to the Debtors.

The confirmation of the Plan and effectiveness of the Plan are subject to certain material conditionsprecedent described herein and in the Plan. There is no assurance that the Plan will be confirmed, or if confirmed,

that the conditions required to be satisfied will be satisfied (or waived).

You are encouraged to read this Disclosure Statement in its entirety, including without limitation, the Plan,which is annexed as Exhibit Ahereto, and the section entitled Risk Factors, before submitting your ballot to voteon the Plan.

Summaries of the Plan and statements made in this Disclosure Statement are qualified in their entirety byreference to the Plan, this Disclosure Statement and the Plan Supplement, as applicable, and the summaries of thefinancial information and the documents annexed to this Disclosure Statement are qualified in their entirety byreference to those documents. The statements contained in this Disclosure Statement are made only as of the date ofthis Disclosure Statement, and there is no assurance that the statements contained herein will be correct at any timeafter such date. Except as otherwise provided in the Plan or in accordance with applicable law, the Debtors areunder no duty to update or supplement this Disclosure Statement.

The information contained in this Disclosure Statement is included for purposes of soliciting acceptancesto, and confirmation of, the Plan and may not be relied on for any other purpose. The Debtors believe that thesummary of certain provisions of the Plan and certain other documents and financial information contained orreferenced in this Disclosure Statement is fair and accurate. The summaries of the financial information and thedocuments annexed to this Disclosure Statement, including, but not limited to, the Plan are qualified in their entirety

by reference to those documents.

This Disclosure Statement has not been approved or disapproved by the SEC or the SVS, or any federal,state, local or foreign regulatory agency, nor has the SEC nor the SVS nor any other such agency passed upon the

accuracy or adequacy of the statements contained in this Disclosure Statement.

The Debtors have sought to ensure the accuracy of the financial information provided in this DisclosureStatement, but the financial information contained in this Disclosure Statement has not been, and will not be, auditedor reviewed by the Debtors independent auditors unless explicitly stated herein.

Upon the Effective Date, certain of the securities described in this Disclosure Statement, including the NewNotes, will be issued without registration under the Securities Act, or similar federal, state, local or foreign laws, inreliance on the exemptions provided under section 4(a)(2) and Regulation S of the Securities Act. Such securitiesmay not be offered or sold except pursuant to a valid exemption or upon registration under the Securities Act,including, without limitation, Rule 144 of the Securities Act.

The Debtors make statements in this Disclosure Statement that are considered forward-looking statementsunder the federal securities laws. Statements concerning these and other matters are not guarantees of the Debtors

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future performance. Such forward-looking statements represent the Debtors estimates and assumptions only as ofthe date such statements were made and involve known and unknown risks, uncertainties and other unknown factorsthat could impact the Debtors restructuring plans or cause the actual results of the Debtors to be materially differentfrom the historical results or from any future results expressed or implied by such forward-looking statements. Inaddition to statements which explicitly describe such risks and uncertainties, readers are urged to considerstatements labeled with the terms believes, belief, expects, intends, anticipates, plans, or similar terms

to be uncertain and forward-looking. There can be no assurance that the restructuring transaction described hereinwill be consummated. Creditors and other interested parties should see the section entitled Risk Factors of thisDisclosure Statement for a discussion of certain factors that may affect the future financial performance of theReorganized Debtors.

III.

FOREIGN EXCHANGE CONVERSION

This Disclosure Statement provides foreign exchange conversions for amounts originally denominated inChilean pesos. Please use the table below as a reference for all exchange rate conversions in this Disclosure

Statement:

2011 2012 2013 YTD March31, 2014

YTD June 30,

2014

Average

US$/CLP$

Exchange Rate

During Period

483.4 486.8 495.0 551.5 552.9

US$/CLP$

Exchange Rate

at the End of

the Period

519.2 480.0 524.6 551.2 552.7

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IV. QUESTIONS AND ANSWERS REGARDING THIS DISCLOSURE STATEMENT AND THE

PLAN

A. What is chapter 11?

Chapter 11 is the principal business reorganization chapter of the Bankruptcy Code. In addition to

permitting debtor rehabilitation, chapter 11 promotes equality of treatment for creditors and similarly situated equityinterest holders, subject to the priority of distributions prescribed by the Bankruptcy Code.

The commencement of a chapter 11 case creates an estate that comprises all of the legal and equitableinterests of the debtor as of the date the chapter 11 case is commenced. The Bankruptcy Code provides that the

debtor may continue to operate its business and remain in possession of its property as a debtor in possession.

Consummating a plan is the principal objective of a chapter 11 case. A bankruptcy courts confirmation ofa plan binds the debtor, any person acquiring property under the plan, any creditor or equity interest holder of thedebtor and any other entity as may be ordered by the bankruptcy court. Subject to certain limited exceptions, theorder issued by a bankruptcy court confirming a plan provides for the treatment of the debtors liabilities inaccordance with the terms of the confirmed plan.

A prepackaged plan of reorganization is one in which a debtor seeks approval of a plan of reorganization

from affected creditors before filing for bankruptcy. Because solicitation of acceptances begins before thebankruptcy filing, the amount of time required for the bankruptcy case is often less than in more conventionalbankruptcy cases. Greater certainty of results and reduced costs are other benefits generally associated withprepackaged bankruptcy cases. If the solicitation of votes in this case extends beyond the Petition Date, the timeline

of this prepackaged plan of reorganization may extend beyond the timeline of other prepackaged cases.

B. Why are the Debtors sending me this Disclosure Statement?

The Debtors are seeking to obtain Bankruptcy Court approval of the Plan. To perform a prepetitionsolicitation of the Plan, section 1126(b) of the Bankruptcy Code requires that the Debtors comply with section 1125of the Bankruptcy Code, which requires the Debtors to prepare a disclosure statement containing adequateinformation of a kind, and in sufficient detail, to enable a hypothetical reasonable investor to make an informed

judgment regarding whether to accept or reject the Plan. This Disclosure Statement is being submitted in

accordance with such requirements.

C. Am I entitled to vote on the Plan? What will I receive from the Debtors if the Plan is

consummated?

Your ability to vote on, and your distribution under, the Plan, if any, depends on what type of Claim youhold. In general, a Holder of a Claim or an Interest may vote to accept or reject a plan of reorganization if (i) no

party in interest has objected to such Claim or Interest (or the Claim or Interest has been Allowed subsequent to anyobjection or estimated for voting purposes), (ii) the Claim or Interest is Impaired by the Plan and (iii) the Holder ofsuch Claim or Interest will receive or retain property under the Plan on account of such Claim or Interest.

Under the Plan, the only classes of claims that meet these requirements are Classes 1A-4A (Senior SecuredNotes Claims). A Holder of a Claim in Classes 1A-4A is entitled to vote to accept or reject the Plan if such Holder

held such Claim as of September 5, 2014 (the Voting Record Date).

In general, if a Claim or an Interest is Unimpaired under a plan of reorganization, section 1126(f) of theBankruptcy Code deems the Holder of such Claim or Interest to have accepted such plan, and thus the Holders ofClaims in such Unimpaired Classes are not entitled to vote on such plan. Because the following Classes areUnimpaired under the Plan, the Holders of Claims in these Classes are not entitled to vote:

Classes 1B through 4B;

Classes 1C through 4C;

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Classes 1D through 4D;

Classes 1E through 4E;

Classes 1F through 4F; and

Classes 1G through 4G.

In general, if the Holder of an Impaired Claim or Impaired Interest will not receive any distribution under aplan of reorganization in respect of such Claim or Interest, section 1126(g) of the Bankruptcy Code deems theHolder of such Claim or Interest to have rejected such plan, and thus the Holders of Claims in such Classes are notentitled to vote on such plan. There are no Holders of Claims or Interests that are conclusively presumed to have

rejected the Plan and, therefore, not entitled to vote.

A summary of the classes of Claims (each category of Holders of Claims or Interests, as set forth inArticle III of the Plan pursuant to section 1122(a) of the Bankruptcy Code, is referred to as a Class) and theirrespective status and entitlement to vote is set forth below. The Plan shall apply as a separate Plan for each of theDebtors, and the classification of Claims and Interests set forth herein shall apply separately to each of the Debtors.All of the potential Classes for the Debtors are set forth herein. Certain of the Debtors may not have Holders ofClaims or Interests in a particular Class or Classes, and such Classes shall be treated as set forth in Section 12.4 of

the Plan.

Each Debtor has been assigned a number for the purposes of classifying and treating Claims against andInterests in each Debtor. The Claims against and Interests in each Debtor, in turn, have been assigned to separatelettered classes with respect to each Debtor based on the type of Claim or Interest involved:

Class Claim/Interest Status Voting Rights

1A 4A Senior Secured Notes Claims Impaired Entitled To Vote

1B 4B Other Secured Claims Unimpaired Deemed To Accept; Not Entitled To Vote

1C 4C Other Priority Claims Unimpaired Deemed To Accept; Not Entitled To Vote

1D 4D General Unsecured Claims Unimpaired Deemed To Accept; Not Entitled To Vote

1E 4E Intercompany Claims Unimpaired Deemed To Accept; Not Entitled To Vote

1F 4F Subordinated Claims Unimpaired Deemed To Accept; Not Entitled To Vote

1G 4G Interests Unimpaired Deemed To Accept; Not Entitled To Vote

D. How do I vote on the plan?

The following materials constitute the solicitation package (the Solicitation Package):

the appropriate Ballot or Master Ballot, 4as applicable, and applicable voting instructions (the VotingInstructions);

a pre-addressed, postage pre-paid return envelope; and

this Disclosure Statement with all exhibits, including the Plan.

4 In accordance with customary practices, the Master Ballot(s) will be distributed approximately seven (7)

days after the initial distribution of Solicitation Packages.

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The voting Classes, Classes 1A through 4A, entitled to vote to accept or reject the Plan were served

the Solicitation Package (including the appropriate ballot) (i) to Nominees (as defined below) by overnight

delivery and by electronic mail (if available) and (ii) to Beneficial Owners (as defined below) by first class

mail. Additional paper copies of these documents may be requested from the Balloting Agent (i) by writing to

Alsacia Ballot Processing, c/o Prime Clerk LLC, 830 Third Avenue, 9th Floor, New York, NY 10022; (ii) by

calling U.S. Toll Free: 844-276-3029 or International Toll: +1 917-258-4616; or (iii) by emailing

[email protected].

The Debtors have engaged Prime Clerk LLC as the Balloting Agent to assist in the balloting and tabulationprocess. The Balloting Agent will, among other things, answer questions, provide additional copies of all

Solicitation Package materials and generally oversee the solicitation process.

Only the Holders of Claims in Classes 1A-4A are entitled to vote to accept or reject the Plan. Unless

otherwise permitted by the Debtors, to be counted, Ballots or Master Ballots must be received by theBalloting Agent by 5:00 p.m. (prevailing Eastern Time) on October 10, 2014, the Voting Deadline; providedthat Holders of Claims who cast a Ballot prior to the time of filing of any of the Debtors chapter 11 petitions shallnot be entitled to change their vote or cast new Ballots after the Chapter 11 Cases are commenced, unless the Plan ismodified in a manner that materially adversely affects the rights of the Holders of Claims; provided, however, thatupon the occurrence of any termination of the RPSA, any and all consents or votes tendered prior to suchtermination by the Consenting Senior Secured Noteholders shall be deemed, for all purposes, to be null and void ab

initio. Upon any such termination, the affected Consenting Senior Secured Noteholders shall have the right (i) tofreely vote their Senior Secured Notes Claims with respect to any chapter 11 plan with respect to the Debtors, (ii) toobject to confirmation of any plan, including the Plan, whether or not an objection deadline regarding such plan has

passed or (iii) seek the reversal or modification of the confirmation of any plan, including the Plan, in any of theChapter 11 Cases. VOTING INSTRUCTIONS ARE ATTACHED TO EACH BALLOT. PLEASE SEE

ARTICLE XVI BELOW ENTITLED SOLICITATION AND VOTING PROCEDURES FOR

ADDITIONAL INFORMATION.

Unless the Debtors, in their discretion decide otherwise, any Ballot or Master Ballot received after theVoting Deadline shall not be counted. The Balloting Agent will process and tabulate the Ballots or Master Ballotsfor the Class entitled to vote to accept or reject the Plan and will file a voting report (the Voting Report) as soon as

practicable after the Petition Date, which Voting Report will be supplemented as soon as practicable after the Voting

Deadline, if necessary.

For answers to any questions regarding solicitation procedures, parties may contact the Balloting Agentdirectly, at Domestic Toll Free: 844-276-3029 or International Toll: +1 917-258-4616, with any questions related to

the solicitation procedures applicable to their Claims and Interests.

Any Ballot or Master Ballot that is properly executed, but fails to clearly indicate an acceptance or

rejection, or that indicates both an acceptance and a rejection of the Plan, shall not be counted.

All Ballots and Master Ballots are accompanied by Voting Instructions. It is important to follow the

specific instructions provided with each Ballot and Master Ballot.

E. Is there anything else that I will need to do to receive the New Notes or the Non-Qualified

Distribution?

Yes. In order to receive the New Notes or the Non-Qualified Distribution, as applicable, Holders of Senior

Secured Notes Claims will be required to deliver their Senior Secured Notes and a Letter of Transmittal: (i) on orbefore the Distribution Election Deadline by completing the Book-Entry Confirmation procedure or (ii) after theDistribution Election Deadline by returning a completed Letter of Transmittal together with any documents requiredin connection therewith. A separate distribution will be made to Holders of Senior Secured Notes Claims shortlyafter the Petition Date, which will include the Letter of Transmittal and related instructions regarding the completionof the Letter of Transmittal and delivery of Senior Secured Notes as contemplated in the Plan. Holders of SeniorSecured Notes Claims that do not fulfill one of the two requirements noted above and as set forth in the Plan fordelivery of their Senior Secured Notes within one hundred and eighty (180) days after the Effective Date shall havetheir Claim and their distribution pursuant to the Plan on account of such Senior Secured Notes Claim discharged

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and forfeited and shall not participate in any distribution under the Plan, see Summary of the Plan ProvisionsGoverning Distributions Distributions on Account of Senior Secured Notes Claims, which begins on page 33.

F. What happens to my recovery if the Plan is not confirmed, or does not go effective?

In the event that the Plan is not confirmed, there is no assurance that the Debtors will be able to reorganize

their businesses. It is possible that any alternative may provide Holders of Claims with less than they would havereceived pursuant to the Plan. For a more detailed description of the consequences of an extended chapter 11

proceeding, or of a liquidation scenario under U.S. or Chilean law,seeConfirmation of the Plan Best Interests ofCreditors/Liquidation Analysis beginning on page 76 and the Liquidation Analysis attached as Exhibit D to this

Disclosure Statement.

G. Are any regulatory approvals required to consummate the Plan?

While no additional regulatory approvals are required to consummate the Plan, the Debtors are subject tosignificant ongoing regulatory approvals in order to operate their businesses. These approvals primarily relate toconcessions the Debtors receive from the government of the Republic of Chile (the Chilean Government) inaccordance with Chilean law. The Debtors businesses are entirely dependent upon the ability to maintain theseconcessions and licenses, without which the Debtors would be unable to provide bus transportation services inSantiago. In order to do so, the Debtors must comply on an ongoing basis with certain conditions, including

technical and financial requirements, restrictions relating to ownership and transfer of ownership and disclosureobligations. Failure to comply with these conditions may trigger termination of the Debtors concessions.

For a more detailed description of the regulatory bodies that oversee the Debtors operations, seeRegulatory Approvals Required to Approve this Transaction beginning on page 89.

H. If the Plan provides that I am entitled to a distribution, do I receive it upon Confirmation or

when the Plan goes effective, and what do you mean when you refer to Confirmation,

Effective Date and Consummation?

Confirmation of the Plan refers to approval of the Plan by the Bankruptcy Court. Confirmation of thePlan does not guarantee that you will receive the distribution indicated under the Plan. After Confirmation of thePlan by the Bankruptcy Court, there are conditions that need to be satisfied or waived so that the Plan can beconsummated and go effective. Initial distributions to Holders of Allowed Claims will only be made on the

Effective Date or as soon as practicable thereafter. SeeConfirmation of the Plan, which begins on page 76, for adiscussion of the conditions to Consummation of the Plan.

Upon Consummation of the Plan, the New Notes will be issued to Qualified Holders without registrationunder the Securities Act, or similar federal, state, local or foreign laws, in reliance on the exemptions provided undersection 4(a)(2) and Regulation S of the Securities Act. These securities may not be offered or sold except pursuantto a valid exemption or upon registration under the Securities Act, including, without limitation, Rule 144 of theSecurities Act. In order to receive the New Notes, Qualified Holders will need to undertake the proceduresdescribed under Summary of the Plan Provisions Governing Distributions Distributions on Account of SeniorSecured Notes Claims, which begins on page 33.

I. Will the Reorganized Debtors be obligated to continue to pay statutory fees as part of the

bankruptcy process after the Effective Date?

Yes. On the Effective Date the Debtors will be required to pay in Cash any fees due and owing to the U.S.Trustee at the time of Confirmation. Additionally, on and after the Confirmation Date, the Reorganized Debtorsmust pay all statutory fees due and payable under 28 U.S.C. 1930(a)(6) until the entry of a final decree, dismissalor conversion of the cases to chapter 7 of the Bankruptcy Code. The Reorganized Debtors will also be required tocomply with reporting requirements, such as filing quarterly post-Confirmation reports and schedule quarterly post-Confirmation status conferences until the entry of a final decree, dismissal or conversion of the cases to chapter 7 of

the Bankruptcy Code.

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J. When will the Plan Supplement be Filed and what will it include?

The Plan Supplement will be filed no later than five (5) Business Days before the date first scheduled forthe Confirmation Hearing, or such later date as may be approved by the Bankruptcy Court, on notice to parties ininterest, and additional documents may be filed before the Effective Date as supplements or amendments to the PlanSupplement, all such documents being in form and substance satisfactory to the Requisite Consenting Senior

Secured Noteholders in accordance with the terms of the Plan and the RPSA, including the following: (a) theRejection Schedule, if any; (b) a list of retained Causes of Action, if any; (c) the identification of any DisbursingAgent other than the Reorganized Debtors; (d) the New Notes Indenture; (e) the Collateral Documents; (f) a list ofthe identity and affiliation of any individual who is proposed to serve as an officer or director of any ReorganizedDebtor; (g) the Non-Compete Agreement; (h) the Letter of Transmittal; and (i) the Call Option Agreement (asdefined in the Description of the New Notes attached as Exhibit Ehereto). The detailed terms of the documents to

be contained in the Plan Supplement have yet to be finalized and will continue to be negotiated by the Debtors.When filed, the Plan Supplement will be available in both electronic and hard copy form, although the Debtors willnot serve paper or compact disk read-only memory (CD-ROM) copies. Details about how to access the PlanSupplement will be provided in the notice sent to all parties in interest upon the commencement of the Chapter 11Cases.

K. What are the Debtors Intercompany Claims and Interests?

In the ordinary course of business and as a result of their corporate structure, certain of the Debtor entitieshold equity of other Debtor entities and maintain business relationships with each other, resulting in IntercompanyClaims and Interests. The Intercompany Claims reflect costs and revenues, which are allocated among theappropriate Debtor entities, resulting in Intercompany Claims. Further, the Intercompany Claims include Claimsarising from intercompany notes by and between certain Debtors, which are pledged to secure the Senior Secured

Notes.

The Plans treatment of Intercompany Claims and Interests represents a common component of a chapter11 plan involving multiple debtors in which the value of the going-concern enterprise may be replicated uponemergence for the benefit of creditor constituents receiving distributions under a plan. The Plan provides thatInterests will be Reinstated. The Plan also provides that each Intercompany Claim will be, at the election of theReorganized Debtors, subject to the prior written consent of the Requisite Consenting Senior Secured Noteholders(which consent shall not be unreasonably withheld), either: (a) released, waived and discharged as of the Effective

Date; (b) contributed to the capital of the obligor Entity; (c) dividended; or (d) remain Unimpaired, as may be agreedto by the applicable Reorganized Debtor and the Holder of such Intercompany Claim subject to the requirements ofand restrictions contained in the New Notes Indenture, if any. The Intercompany Claims will be pledged to securethe New Notes as described in the Description of the New Notes.

L. How will Claims asserted with respect to rejection damages affect my recovery under the

Plan?

Because the Plan provides for payment in full to Holders of General Unsecured Claims, Claims arisingfrom the Debtors rejection of Executory Contracts and Unexpired Leases will not impact the recoveries to Holders

of any Claims in any Class.

M. Will there be releases granted to parties in interest as part of the Plan?

The Plan proposes to release each of: (a) the Debtors; (b) the Alsacia Shareholders; (c) the CollateralTrustees; (d) the Trustee; (e) the Ad Hoc Group and its members, the Consenting Senior Secured Noteholders; and(f) with respect to each of the foregoing Entities in clauses (a) and (e), such Entitys successors and assigns, andcurrent and former Affiliates, subsidiaries, officers, directors, members, stockholders, partners, principals,employees, agents, financial advisors, attorneys, accountants, investment bankers, consultants, representatives andother Professionals, solely in their respective capacities as such. For the avoidance of doubt, the Ad Hoc GroupAdvisors will be Released Parties.

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PURSUANT TO THE PLAN, IF YOU RETURN A BALLOT AND VOTE TO ACCEPT THE PLAN OR IF

YOU VOTE TO REJECT OR ABSTAIN FROM VOTING ON THE PLAN AND DO NOT

AFFIRMATIVELY OPT OUT OF THE RELEASE PROVISIONS IN SECTION 8.4 OF THE PLAN, YOU

WILL BE DEEMED, AS OF THE EFFECTIVE DATE, TO HAVE CONCLUSIVELY, ABSOLUTELY,

UNCONDITIONALLY, IRREVOCABLY AND FOREVER RELEASED AND DISCHARGED ALL

CLAIMS (AS DEFINED IN THE PLAN) AND ALL CAUSES OF ACTION (AS SET FORTH IN THE

PLAN) AGAINST THE RELEASED PARTIES (AS DEFINED IN THE PLAN).

For more detail see Effect of Confirmation of the Plan, which begins on page 40.

N.

What is the deadline to vote on the Plan?

5:00 p.m. (prevailing Eastern Time) on October 10, 2014.

O. What is a Confirmation Hearing and will the Bankruptcy Court hold a Confirmation

Hearing?

Under section 1128(a) of the Bankruptcy Code, the Bankruptcy Court, after notice, may hold a hearing toconfirm a plan of reorganization. If the Debtors file the Chapter 11 Cases, they will file a motion on the PetitionDate requesting that the Bankruptcy Court set a date and time approximately 35 days after the Petition Date for theConfirmation Hearing in the Bankruptcy Court. The Debtors also will request that the Bankruptcy Court approvethis Disclosure Statement at the Confirmation Hearing. The Confirmation Hearing, once set, may be continued fromtime to time, subject to the terms of the RPSA, without further notice other than an adjournment announced in opencourt or a notice of adjournment filed with the Bankruptcy Court and served on those parties who have requestednotice under Bankruptcy Rule 2002 and the Entities who have filed an objection to the Plan, if any, without furthernotice to parties in interest. The Bankruptcy Court, in its discretion and prior to the Confirmation Hearing, may putin place additional procedures governing the Confirmation Hearing. Subject to section 1127 of the BankruptcyCode and the RPSA, the Plan may be modified, if necessary, prior to, during or as a result of the Confirmation

Hearing, without further notice to parties in interest.

Additionally, section 1128(b) of the Bankruptcy Code provides that any party in interest may object toConfirmation. The Debtors, in the same motion requesting a date for the Confirmation Hearing, will request that theBankruptcy Court set a date and time for parties in interest to file Plan objections. All objections to the Plan must be

filed with the Bankruptcy Court and served on the Debtors and certain other parties in interest in accordance withthe applicable order of the Bankruptcy Court so that they are received on or before the deadline to file suchobjections.

P. What is the effect of the Plan on the Debtors ongoing businesses?

The Debtors are reorganizing pursuant to chapter 11 of the Bankruptcy Code. As a result, if the Debtorsobtain Confirmation of the Plan and the Effective Date of the Plan occurs, the Debtors will not be liquidated orforced to go out of business. The Reorganized Debtors will continue to operate their businesses going forward usingcash from operations.

Q. Do the Debtors recommend voting in favor of the Plan?

Yes. The Debtors believe the Plan provides for a larger distribution to the Debtors creditors than would

otherwise result from any other available alternative. The Plan embodies a settlement among the Debtors and theirkey creditor constituencies on a consensual transaction that will reduce the Debtors debt service obligations and

position the Debtors for continued operations through the issuance of New Notes to Qualified Holders of SeniorSecured Notes Claims and the Non-Qualified Holder Distribution to Non-Qualified Holders of Senior Secured Notes

Claims. Therefore, the Debtors believe the Plan is in the best interest of all creditors.

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V. THE DEBTORS CORPORATE HISTORY, STRUCTURE, AND BUSINESS OVERVIEW

A. The Debtors Prepetition Organizational and Capital Structure 5

B. Summary of the Debtors Businesses and Corporate History

Inversiones Alsacia S.A. (Alsacia) is a corporation, organized under the laws of Chile, incorporated onNovember 22, 2004. Express de Santiago Uno S.A. (Express and, together with Alsacia, the Concessionaires)is a corporation, organized under the laws of Chile, incorporated on November 22, 2004. Inversiones Eco Uno S.A.

(Eco Uno) is a corporation, organized under the laws of Chile, incorporated on November 22, 2004. PanamericanInvestments Ltd. (Panamerican) is a limited liability company organized under the laws of Bermuda, incorporated

on November 16, 2010.

The GPS Group

Global Public Services S.A. (the GPS Group) and its controlling shareholders have operated businessesin various sectors, including urban transportation, process outsourcing, environmental solutions and real estatedevelopment. The GPS Group is controlled by Carlos Ros, Javier Ros and several of their affiliates.

Alsacia

The GPS Group founded Alsacia to explore investment opportunities in the Transantiago system. OnJanuary 28, 2005, Alsacia entered into a concession agreement with the Ministry of Transportation and

Telecommunications (MTT) for the right to operate Trunk Line 1 of the Transantiago system. Alsacia operated afleet of over 752 buses as of June 2014, employed 3,132 people as of June 2014 and transported approximately370,000 passengers per work day during the six-month period ending in June 2014.

5Carlos Ros directly owns 0.003% of Alsacia, 0.002% of Express and 0.3% of Eco Uno.

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Express

Express was incorporated in 2004 under Chilean law as a joint venture between the controllingshareholders of the GPS Group and another Colombian investor group. In January 2005, Express entered into aconcession agreement with the MTT for the right to operate Trunk Line 4 of the Transantiago system and startedoperating the line in October 2005. Express operated a fleet of over 1,244 buses as of June 2014, employed 4,620

people as of June 2014 and transported an average of approximately 625,000 passengers each week day during thesix-month period ended June 2014. In 2011, the GPS Group and their joint venture partner separated their jointoperations, and the GPS Group acquired their partners interest in Express and combined it with Alsacia, in part byusing the proceeds of the Senior Secured Notes.

The Transantiago System and the AFT

Transantiago is the trade name of the public transportation system of the Santiago, Chile metropolitan area,consisting of the citys buses, the Santiago Metro subway (the Metro, which is operated by a public companyowned by the Chilean Government), an integrated electronic payment system, as well as planning and constructionfunctions for transportation infrastructure. It is a critical part of the lives of a large segment of Santiago residents,who rely on it for their daily commuting needs. Transantiago is administered by the MTT through a series ofcontracts and is not a separate legal entity.

Transantiago bus lines are divided into trunk lines and feeder lines. The trunk lines complement the Metroand travel longer distances with fewer stops between different zones of the city. Trunk buses often travel ondedicated bus-only lanes across the city. The trunk lines are divided into five business units that are eachindividually operated by a bus concession holder, including each of the Concessionaires, which operate Trunk Lines1 and 4, respectively. Feeder lines travel shorter distances with more frequent stops within each of 10 zones in thecity, which correspond to various municipalities within the Santiago metropolitan area. The feeder lines are dividedinto nine business units that are operated by seven bus concession holders, including Feeder Line D which isoperated by Express.

Since 2009, Transantiago passenger fares are set by the panel of experts appointed by the MTT, which wasestablished by the same law that created the original Transantiago subsidy. The panel of experts determines, on amonthly basis and in light of available subsidies, the price of fares that will be charged to bus passengers based on amethodology established by the MTT. The current bus fare on Transantiago buses is CLP$620 (approximately

US$1.10), which includes up to three free bus transfers, plus an additional fee of either CLP$20 (less than US$0.10)or CLP$80 (approximately US$0.10) to transfer to the Metro, depending on the time of the day. Payment of fares ismade with a prepaid smart card with an embedded microchip called the Bip! card, which can be purchased fromvending machines, vendors and kiosks throughout the city. The payment system is operated by the AdministradorFinanciero de Transantiago (the AFT), which is a private company that contracted with the MTT to manageTransantiagos payment systems and cash flows. The AFT is responsible for all aspects of the Transantiago paymentsystem, including the implementation and maintenance of the electronic payment systems and the collection anddistribution of funds from passengers and the Chilean Government to the bus concession holders (including Alsacia& Express).

Current Network in Santiago and Breadth of Business

The combined operations of the Concessionaires represent the largest bus transportation operator in theSantiago metropolitan area, as measured by bus capacity and scheduled route length. In 2013, the Concessionaires

together accounted for approximately 31.0% of the bus transportation system in the Santiago metropolitan area interms of total kilometers traveled, number of total passenger and number of buses. Together, the Concessionaires

provide bus service to the population of the Santiago metropolitan area of over 6 million people, and maintain a fleetof 1,996 buses. The operating routes of both companies service the east and west regions of the city, throughAlsacias Trunk Line 1 and Express Trunk Line 4 and Feeder D. The average route length in one direction is 20kilometers for Alsacia and 23 kilometers for Express. In 2013, Alsacias and Express buses traveled 144 millionkilometers and transported 315 million passengers.

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the Concessionaires maintain a workforce of over 7,500 employees. Alsacia has relationships with 92unions (the Alsacia Unions), and Express has relationships with 117 unions (the Express Unions, and togetherwith the Alsacia Unions, the Unions). The Concessionaires each have a standard collective bargaining agreementthat governs the relationships with the Alsacia Unions and the Express Unions, respectively. More than 5,600(nearly 75.0%) of the Concessionaires employees are members of the Alsacia Unions or the Express Unions. theConcessionaires have also extended the rights and benefits provided for in the collective bargaining agreements to

all employees, regardless of whether an individual employee is a member of the Unions or was employed by Alsaciaor Express at the time the collective bargaining agreements were negotiated, as required under Chilean law.

Concession Agreements

As noted above, the Concessionaires entered into concession agreements with the MTT on January 28, 2005.These concessions were replaced with new concessions agreements that came into effect in 2012, and were amendedagain in 2013 and 2014. Under the terms of the Concession Agreements, the MTT granted the Concessionaires theright to use the roads of the city of Santiago for the provision of urban passenger transportation services within thescope of their respective business units. In exchange for the provision of these services, the Concessionaires receive

payments under the Concession Agreements from the AFT, for their operation of bus services. Neither Alsacia norExpress collects any fares directly from their passengers. Rather, payments are made by the AFT to theConcessionaires on a bi-weekly basis.

Revenue Formulas

The revenue formulas for each of Alsacia and Express under the Concession Agreements have two primarycomponents: Base Revenue and Variable Revenue (each as defined below). In 2013, Variable Revenue comprised65.0% and 66.0% of Alsacias and Expresss respective gross revenue, and Base Revenue comprised 27.0% and28.0% of Alsacias and Expresss respective gross revenue. For the six months ended June 30, 2014, VariableRevenue comprised 66.0% and 67.0% of Alsacias and Expresss respective gross revenue and Base Revenuecomprised 26.0% and 27.0% of Alsacias and Expresss respective gross revenue. Base Revenue is adjusted, basedon performance, by the Service Fulfillment Ratio and Discounts (each as defined below). The diagram below showsthe basic revenue formula for each of Alsacia and Express as of 2012, and descriptions of the four majorcomponents of the formula follow.

Variable Revenue = Payment per Passenger (Pago por Pasajero Transportado, or PPT) * Paid Passenger Validations

Payment per Passenger (PPT) = PPTo * CAMPPTo = The initial PPT was CLP$472 for Alsacia and Express, which has since been increased to

CLP$494 as of February 2014 for Alsacia and CLP$493 as of February 2014 for Express

Paid Passenger Validations = Total Passenger Validations Unpaid Passenger ValidationsUnpaid Passenger Validations = Transfer between buses owned by the same company within two-

hour window.

Every 24 months, the MTT and the Concessionaires revise PPT to account for the Passenger-KilometerIndex (IPK) for the last 12 months. If IPK has fallen during the last 12 months with respect to Base IPK set in theConcession Agreement, PPT will rise proportionally. If IPK has risen during the last 12 months with respect to BaseIPK, PPT will fall proportionally. Although the revision of PPT for the Concessionaires was scheduled to occur inMay 2014, as of the date of this Disclosure Statement a final determination of PPT for the Concessionaires had notyet been made by the MTT.

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Base Revenue = Kilometers * PKtKilometers = Kilometers in the operating plan, which is set twice per year following discussions among theMTT and the Company.

PKt = Payment per kilometer for different categories of buses indexed by CAM. The initial PKt are CLP$251

for type A1 and A2 buses, CLP$360 for type B1 and B2 buses and CLP$568 for type C2 buses. PKt isadjusted by the Cost Index.

The Cost Index accounts for changes since July 2011 across the applicable indices, as set forth in the ConcessionAgreements. The specific weight given to each index also included in the Concession Agreements and is

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