International, vertically integrated pipe and wheel company (TAC) “Interpipe” was announced on Friday the completion of the restructuring with a partial write-off of existing indebtedness of the group prior to its main financial creditors, including Eurobonds for $200 million with a coupon of 10.25% and maturing in 2017.
According to the release, as a result of restructuring, the debt was reduced and formalized by a new issue of Eurobonds on $309 million 192,058 thousand of 10.25% with a maturity in 2024 and a loan of $45,808 million maturing at the end of 2020.
In addition, as part of the restructuring, the company issued 3,054 thousand tools (units) recovery of cost, payment tied to EBITDA and cash flow, “Interpipe” in the next 10 years.
Separately was restructured with a partial cancellation of the group’s liabilities on loans for working capital financing and decorated in two new loan of $45 million maturing at the end of 2020.
In addition to the restructuring, existing shareholders of the group made additional cash capital to the group in the amount of $50 million and provided an additional reserve obligation in the amount of $20 million to facilitate operational metrics of the group after the restructuring.
“The group continues its activities, focusing on key strategic initiatives such as implementation of investment programs, diversification of its geographical presence and product range to strengthen its position as a leading producer of pipes and wheels in the traditional markets and increase sales of their products in world markets”, emphasized the statement.
It is also noted that the group appreciates the support rendered by all stakeholders in the process of restructuring. The group believes that a sustainable and robust capital structure was provided as a result of restructuring and will provide a solid Foundation for future business growth.
As reported, the maturity of new bonds is 31 December 2024, the rate remained the same – 10.25% per annum. It was assumed that for every $1000 principal amount of existing bonds, the owner will get the paper worth $410,53. In the result the total amount of issued new bonds to holders of previously issued was estimated at $82 million 105 thousand 347,92 on the date of entry into force of the agreement on the restructuring, but the new bond is also established obligations to other creditors participating in the restructuring.
Interest on the new bonds will be paid in equal installments every six months. However, the company undertakes in the period until 31 December 2023 to redeem the new bonds in the amount of $150 million plus accrued and unpaid interest.
Earlier in the Memorandum “Interpipe” has explained that the group’s financial performance was heavily influenced by adverse market changes caused by the decline in oil prices and other commodities, as well as the recent geopolitical events in the region. In the period from 2012 to 2016 revenue and EBITDA of the group decreased by 71% and 85% respectively, which led to a reduction in the ability of the company to repay the debt. In 2013, the group has not fulfilled some financial obligations and missed scheduled principal payments in the amount of $106 million. This led to cross-defaults on loans the group’s and the beginning of the process of financial restructuring.
As noted by the company, since revenue and EBITDA recovered, an increase in 2017 by 59% and 158%, respectively, compared to 2016. In 2018, total group revenue increased 33.3% to $1 billion or 74.2 million, EBITDA – by 31.8%, to $157,6 million and a net loss declined by 28.5% to $48 million.
According to the Memorandum, in General, it was proposed to restructure its debt in the amount of $1,411 billion in $400 million In particular, $263,2 million debt for electric steel melting complex “dniprosteel” was proposed to restructure the $72.6 million, $about 125.4 million in loans for working capital – $45 million, $USD 725.4 million in other loans of $200,3 million
The documents also indicated that the new holding company “Interpipe” is becoming Interpipe Limited Interpipe Holdings Plc.
Interpipe is among the ten largest producers of seamless pipes, is the third largest producer of forged railway wheels in the world.
The structure is of five industrial assets “Interpipe Nizhnedneprovsky tube rolling plant (NTRP)”, “Interpipe Novomoskovsk pipe plant (nmpp)”, “Interpipe Niko-tube”, “Dnepropetrovsk Vtormet” and arc-furnace complex “Ukraine” brand “Interpipe Steel”.