Metalcorp reaches agreement on bond restructuring, calls for vote

Chicago, Nov. 6 – Metalcorp Group SA announced it reached an agreement on the details of a bond restructuring and is calling noteholders of its bonds due 2026 to a vote, according to a notice.

The bonds subject to the restructuring are the €69.9 million of 9% notes due 2023 (ISIN: DE000A19MDV0) and the €300 million of 8½% notes due 2026 (ISIN: DE000A3KRAP3).

The company has worked out an agreement with the 2023 notes common representative, members of an ad hoc group composed of holders of the 2026 notes representing approximately 40% of the outstanding nominal amount of those notes, certain holders of the 2023 notes and Ferralum Metals Group SA.

Details

Noteholders from both notes will have the opportunity to contribute new money through the issuance of a new €12.5 million secured bond to the former aluminum and bulk and ferrous business of Metalcorp, which was sold to Ferralum in May.

A subsidiary of Ferralum will be the issuer.

The new money notes will be discounted to 80.

Subscribers to the new money notes will also receive allocation in a new €66 million secured notes issue by Ferralum plus two new notes issued by a newly established subsidiary of Metalcorp (MCG New HoldCo) with the nominal amount being issued enough to cover the remaining amounts outstanding under the notes plus interest.

The new money notes will be issued with equity interest in a newly established company holding an indirect 49% interest in Ferralum. The equity instruments entitle their holders to a €7.5 million preferred equity return.

For holders not contributing new money, they will receive a guaranteed allocation in the Ferralum notes and the two new Metalcorp notes.

New money contributors will receive more weighting in the allocations, with the exact exchange ratios disclosed in a separate investor presentation.

The new Metalcorp notes will not have any amortization payments but will be serviced by MCG New HoldCo only with proceeds from the direct sale of, or similar transactions with respect to, the operating subsidiaries of MCG New HoldCo.

Notably, Metalcorp has changed its business model to generate revenue from direct sales or earn-out agreements in respect of its subsidiaries. There has already been one such transaction. As the company finalizes similar transactions with respect to Tennant Metals and TML, net proceeds will be distributed to the holders of the new Metalcorp notes instead of having a regular repayment date.

Amsterdam-based Metalcorp is a service provider in the metals and minerals industry.

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