Vallourec Reaches Financial Restructuring Deal with Creditors

Benoit Van Overstraeten and Matthieu Protard
Wednesday, February 3, 2021

French steel pipemaker Vallourec said on Wednesday it has reached an agreement in principle on financial restructuring with its main creditors.

It has filed a request with the commercial court of Nanterre, in greater Paris, for the opening of safeguard proceedings, the company said in a statement.

The deal, which reduces its debt by 1.8 billion euros ($2.16 billion), has "been entered into by the company and a group of lenders representing together 65.1% of the total amount of the company's financial debt", Vallourec said.

The loss-making company, which abandoned an 800 million euro capital increase last year due to a pandemic-induced fall in oil prices, opened talks with its creditors in November to convert a little more than half of its 3.5 billion euro debt into equity.

"The agreement in principle has been approved unanimously by the members of the company's supervisory board," Vallourec said.

Under the terms of the financial restructuring plan, funds Apollo and SVPGlobal will become Vallourec's two new main shareholders.

Apollo will hold between 23.2% and 29.3% of the company's capital with SVPGlobal taking a stake of between 9.7% and 12.3%.

Vallourec said its current largest shareholders, French state-owned bank Bpifrance and Japan's Nippon Steel Corporation, had confirmed their support for the agreement, under which their shareholdings will be diluted.

Bpifrance's stake will drop to 2.3% from 14.56% and Nippon Steel will hold 3% of Vallourec, down from 14.56%.

($1 = 0.8318 euros) (Reporting by Benoit Van Overstraeten and Matthieu Protard; editing by Jason Neely, Kirsten Donovan)


Categories: Finance Energy Subsea Pipelines Activity Europe

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