New Reclamation Group: 2012 bond repurchase not distressed exchange

By Caroline Salls

Pittsburgh, Nov. 9 - New Reclamation Group said in response to a Standard & Poor's release that it does not consider the buyback of its bonds to be a distressed exchange.

According to a New Reclamation news release, the company views the buybacks as a continuation of its stated policy to manage its debt by repurchasing bonds in the open market if and when the opportunity arises.

New Reclamation said it has repurchased bonds in the open market before, including a repurchase in 2008.

The company said it believes that the 2012 buybacks had a positive effect on its debt profile because New Reclamation has reduced overall leverage and interest expense by reducing bond liability by 24%, its security cover has increased, and the maturity profile of the company's debt has been partially extended.

New Reclamation said it made a disclosure to bondholders on Oct. 30, telling the bondholders that the secured bonds due Feb. 1, 2013 are reflected in the annual financial statements as a current liability.

In order for the company to settle its financial obligations on the secured bonds, New Reclamation told the bondholders that its board was negotiating a combination of refinancing transactions, including raising term loan funding from local and/or offshore lenders, raising finance utilizing the group's property portfolio, plant and equipment, purchasing bonds through open market purchases using internally generated funds and raising funding from shareholders.

Based on various discussions and progress with the various potential funders, the company told bondholders that the directors believe the company will meet its secured bond obligations as they fall due.

New Reclamation Group is a Johannesburg, South Africa, recycled metals company.

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