Brazilian Cement Giant Negotiates R$22 Billion Debt Overhaul
InterCement, a major cement company, has filed an extrajudicial recovery plan with the São Paulo court system. The plan aims to restructure R$22 billion ($4 billion) after four and a half months of negotiations.
Itaú Unibanco and Bradesco, representing 45.67% of the eligible credits, have agreed to the plan. The company’s request has been approved by the judge, suspending debt collections for 120 days.
InterCement continues to negotiate the sale of its shareholding, assets, and operations to a third-party investor. This sale is a crucial condition for the plan’s effectiveness.
The restructuring plan does not include Mover, InterCement’s parent company. Mover has reached a separate agreement with its sole financial creditor, Bradesco BBI.
This development comes after a 60-day final negotiation attempt announced by the company. Of the R$22 billion ($4 billion) debt, R$12.8 billion ($2.33 billion) consists of inter-company loans within the InterCement group.
The company’s major creditors include Bradesco, Italy, and Banco do Brasil. These banks hold secured and unsecured claims totaling R$5.9 billion ($1 billion).
Banco do Brasil and foreign bondholders have not yet agreed to the restructuring plan. The bondholders have unsecured claims amounting to R$3.1 billion ($0.56 billion) against the group.
InterCement’s Restructuring Efforts
InterCement is actively engaging with these parties to reach the required 50% plus one approval. The company has 90 days to obtain the necessary quorum for the judge to approve the extrajudicial restructuring plan.
The law requires approval from one-third of creditors to file the request. Currently, only Bradesco and Itaú have agreed to the plan.
In addition, recent negotiations have involved CSN, the sole remaining interested party in acquiring the cement company.
However, CSN has identified various contingencies that could impact its financial leverage promises to the market. CSN reportedly offered around R$10 billion ($1.82 billion) for InterCement.
This extrajudicial recovery plan marks a significant step in InterCement’s efforts to address its financial challenges and restructure its substantial debt.
In short, the outcome of ongoing negotiations and the potential sale of assets will play crucial roles in the company’s future.
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