Nyrstar seeks consents for 2019, 2024 notes amendments, waivers

By Marisa Wong

Morgantown, W.Va., May 14 – Nyrstar Netherlands (Holdings) BV announced it has begun a consent solicitation to amend its €340 million 8˝% senior notes due 2019 and €500 million 6 7/8% senior notes due 2024 guaranteed by parent company Nyrstar NV.

Nyrstar is seeking to amend the note indentures to facilitate the implementation of a scheme of arrangement.

As previously announced, the company has reached an agreement with some members of its key stakeholder groups for a financial restructuring.

In connection with the restructuring, the company has entered into a lock-up agreement with Trafigura Pte. Ltd., Trafigura Group Pte. Ltd., some holders of the 2019 notes, some holders of the 2024 notes and some holders of its €115 million 5% convertible bonds due 2022.

Noteholders that are party to the lock-up agreement as of May 13 represent about 93% of the aggregate outstanding principal amount of the 2019 notes and over 93.6% of the aggregate outstanding principal amount of the 2024 notes. Under the terms of the lock-up agreement, the supporting noteholders have agreed to do whatever is necessary to effect the restructuring, including voting in favor of the consent solicitation and the scheme of arrangement.

As previously reported, under the lock-up agreement Trafigura has agreed to provide a new $250 million committed term loan to Nyrstar Netherlands’ direct subsidiary, Nyrstar Sales & Marketing AG, which will benefit from security over some assets of the Nyrstar group.

In connection with the bridge loan, two new English companies are expected to be incorporated into the Nyrstar group. NewCo 1 will be incorporated as a direct subsidiary of Nyrstar and NewCo 2 will be incorporated as a direct subsidiary of NewCo 1. NewCo 1 is expected to guarantee the group’s obligations under the bridge loan and in that case is expected to also act as an additional guarantor for the 2019 and 2024 notes.

NewCo2 will become a co-issuer under the 2019 and 2024 notes and the convertible bonds and will subsequently propose a scheme of arrangement under section 899 of the U.K. Companies Act 2006 in order to restructure the bonds, according to Nyrstar’s announcement on Tuesday.

In addition, Nyrstar Netherlands is requesting a temporary waiver for the period from March 15 to the earlier of the termination of the lock-up agreement and Aug. 30 of (i) any defaults or events of default arising from the issuer’s failure to make the interest payment due on March 15 and (ii) any payment default under any other of Nyrstar’s debt and any related acceleration of that debt prior to its stated maturity if that debt is not permitted to be paid under the terms of the lock-up agreement.

As previously reported, an interest payment of about €31.6 million was due on March 15, subject to a discretionary 30-day grace period. The company had announced on March 15 that it would defer the coupon payment and use of the grace period to carry out discussions with some of its financial stakeholders on a restructuring transaction.

Nyrstar sought a similar waiver for the March coupon default under a consent solicitation that began on April 15 but did not obtain sufficient votes.

The new consent solicitation expires at 5 p.m. ET on May 21.

The proposed amendments and payment default waiver require consents from holders of a majority in principal amount of the relevant note series under the applicable indenture. The March coupon default waiver requires consents from holders of at least 90% of the outstanding principal amount.

Holders who agreed to the lock-up are required to consent to the majority consent proposals (the proposed amendments to the indenture and the payment default waiver) as well as the March coupon default waiver.

Lucid Issuer Services Ltd. (+44 20 7704 0880, attn.: Oliver Slyfield, nyrstar@lucid-is.com) is the information and tabulation agent.

Nyrstar is a multi-metals business incorporated in Belgium with corporate offices in Zurich.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.