Company has enlisted Citi to seek strategic partner for green hydrogen production project in Bahia and has put operation in Mexico up for sale
08/16/2023
Amid efforts to stem a severe financial crisis, petrochemical company Unigel has made progress in negotiations with creditors, who have already begun to explore potential buyers for the company or its industrial assets, sources told Valor.
According to two sources familiar with the matter, Unigel bondholders and their advisors have approached companies in the petrochemical sector to gauge interest in a potential transaction.
The company had already enlisted Citi to seek a strategic partner for the green hydrogen production project in the state of Bahia, requiring investments of up to $1.5 billion, and put its relatively small operation in Mexico up for sale. According to one of the sources, the creditors’ probing goes further, including other assets in Brazil.
With bondholders, Unigel is seeking an additional 90 days to conclude the renegotiation of R$500 million in bonds issued last year, the maturity of which may be accelerated due to a breach of a commitment related to financial leverage. As Valor learned, discussions are underway with a group representing 70% of the bondholders.
Given the progress in negotiations, Unigel has convened a general assembly for September 5th, which will vote on the 90-day extension and set the final terms for the debenture renegotiation.
According to a notice published Tuesday, the assembly will decide on the possibility of the company entering into new financial operations to invest in ongoing growth projects or meet the recurring expenses of its operation and potential formalization of real guarantees for this debt, among other matters.
According to sources, “special situations” funds have made resources available to the company.
In a statement, the company said that this is “a fundamental step in the enhancement process” of its capital structure.
“Unigel reiterates its confidence in the process and continues to work towards a positive solution for all parties involved and will keep its investors and the market informed about the relevant aspects of its business,” added Unigel.
Unigel has also held talks with holders of $110 million in bonds and other financial creditors. Recently, one of the sources mentioned, it managed to extend commitments made with Morgan Stanley and Goldman Sachs by 60 days.
The company had planned to release its second-quarter results Tuesday, which are expected to confirm the breach of commitment made in the debenture issuance. However, the publication was postponed due to ongoing negotiations with creditors. A new date has not yet been set.
*Por Stella Fontes — São Paulo
Source: Valor International