The Brazilian group InterCementowner of the cement company in Argentina Black Hillasked the Brazilian justice enter bankruptcyafter the failure of attempts to reach an out-of-court agreement with its main creditors.
This situation implies, among other things, the end of the exclusivity period that InterCement had agreed with another Brazilian group, Companhia Siderúrgica Nacional (CSN), to negotiate the transfer of 100% of the share package that includes, among other assets, Loma Negra.
The news was communicated to the National Securities Commission through a Relevant Fact presented by Loma Negra: “Today InterCement reported that, despite the efforts made With respect to the negotiations regarding the restructuring of its debt and the readjustment of its capital, it has requested the initiation of a Judicial Recovery procedure (RJ)”.
And he added: “At this time, the presentation of a judicial recovery application has become the most appropriate option to ensure the continuity of efforts around the ongoing restructuring projectdue to the infeasibility of reaching a definitive agreement within the scope and term of extrajudicial recovery.”
Now, with the start of the Judicial Recovery (RJ) procedure, the CSN group loses the privileged position to negotiate the purchase. And then it opens the possibility that other interested parties can submit their proposals again, not by the total shares of InterCement but by some of its specific assets.
InterCement’s millionaire debt
InterCement is the indirect controlling shareholder of Loma Negra in Argentina and faces problems with the payment of its corporate debt.
The liabilities of this company owned by the Camargo Correa group equivalent to about US$1,560 millionaccording to estimates published in the media in that country. Half of its debts are concentrated in three Brazilian banks: Bradesco, Itaú and Banco do Brasil.
While seeking an out-of-court agreement with his creditors since last September, he was simultaneously negotiating the sale of his shares to CSN. This management was carried out under an umbrella of exclusivity which expired on the 16th of this monthafter having been extended four times.
According to industry sources consulted by Scopethe end of the exclusivity period has nothing to do with a lack of understanding between the parties but rather a situation of incompatibility with the debt restructuring process before the justice of Brazil.
In that discussion to organize payments, it was not possible to maintain a protection bubble in favor of a certain group. The process requires that all assets are available to decide its future based on the commitments that InterCement assumes before Justice to compensate its creditors.
“This measure will provide stability preserving its ability to generate value for its clients, employees, suppliers, partners and other interest groups, and that will allow the negotiations to be concluded in a timely manner,” InterCement explained in the communication it sent to the CNV of Argentina and the San Luis Stock Exchange. Pablo, Brazil.
InterCement also reported that it “maintains and reaffirms its confidence in its operational solidity, and is certain that the Judicial Recovery will assist in the construction of a definitive solution to restore your economic and financial balancethus allowing the maintenance of its good operational performance.”
With the approval of the Judicial Recovery plan, InterCement will be six months to renegotiate its debt and approve a financial restructuring plan.
Loma Negra is the most coveted jewel in the negotiations
In this framework, Loma Negra is an asset that generates a lot of attraction among different investors. Its sale separately from other group properties is a possibility that is gaining ground in this new context..
For this reason, in the communication to the CNV it was also clarified that “Loma Negra is not part of the RJ but only certain foreign companies of the Group participate, and therefore, said presentation It does not affect the rights and obligations of Loma Negra nor its operations.which will continue to be executed as usual. Likewise, there are no contracts with clauses that accelerate payment terms or generate non-compliance by the Company.”
According to Brazilian media, spokespersons from InterCement’s legal area explained that “the focus is no longer on selling the company as was done until now, but rather the company will focus on financial restructuring, negotiating with its creditors and potentially selling some assetss”.
For this, InterCement will have to divide its assets into Isolated Production Units (UAP) with 10 factories it has in Brazil, three cement brands (Cauê, Goiás and Zebu) and 21 distribution centers.
Outside of its country, the most appreciated asset at the moment is Loma Negra, which has potential buyers from Argentina and abroad.
The list of interested parties, between Argentines and Brazilians
Among the locals is the businessman Marcelo Mindlinowner of the company Pampa Energía. Mindlin intends to integrate Loma Negra into the production chain of its construction company Sacde.
Among the best-known works of this firm are the work on the Néstor Kirchner gas pipeline and the reversal of the Norte gas pipeline, in partnership with the Techint group.
The interest of some top-level Argentine oil companies among the candidates is also mentioned.
In any case, with the scheme that opens from the judicial instance CSN is not left out of the list of candidates, although it has lost the exclusivity to negotiate.
Analysts estimate that this procedure opens up the possibility of purchasing assets separately without having to take charge of the accumulated debts.
This also favors Votoratin, a group that leads the Brazilian cement market with 35% of the pie. Another competitor that appears is Polimix, owner of Mizu Cimentos, which showed interest in InterCement at the beginning of the process.
Source: Ambito
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