Geo to restructure big chunk of debt

By Cyntia Barrera Diaz and Noel Randewich)

MEXICO CITY (Reuters) - Geo, one of Mexico's leading homebuilders, plans to restructure up to 70 percent of its debt this year and grow its sales as much as 10 percent despite a slumping economy.

Chairman and Chief Executive Luis Orvananos told the Reuters Latin American Investment Summit in Mexico City that his company plans to build around 60,000 new houses in 2009 to keep up with steady demand from first-time buyers.

Fallout from the U.S. credit crunch created tough borrowing conditions for companies in Mexico, especially in the market for commercial paper.

Orvananos said Geo (GEOB.MX) plans over the next few months to extend the maturities of much of its 7.8 billion pesos ($594 million) in mostly short-term debt.

"What we want is to extend maturities, long term ... we are looking for 10, 15 years," Orvananos said.

Shares of Geo rose 10.2 percent on Wednesday to 23.33 pesos.

Geo and competitors like Homex (HOMEX.MX) and Ara (ARA.MX) specialize in mass-producing small houses that sell for under $30,000.

Despite a shrinking economy, Mexico's housing industry is expected to expand this year thanks to steady financing available from government-backed mortgage lender Infonavit.