Recylex’s German unit needs €17.4 million more cash than forecasted

By Caroline Salls

Pittsburgh, June 17 – Recylex SA announced Monday that its German subgroup’s projected cash requirements for 2019 have been increased to an estimated €44.4 million from an in initially forecasted €27 million because of “significant deterioration” of specified driving factors.

According to a news release, those factors include the persistence of technical difficulties at the Weser-Metall GmbH lead smelter, despite recent improvements, resulting in insufficient production levels, as well as the recent worsening of commercial conditions, which was also impacted by a temporary lower industrial performance following a scheduled maintenance shutdown of Harz-Metall GmbH that occurred during the second quarter.

Recylex said the driving factors also include a strong decline in zinc and lead prices in euros, which respectively decreased by 12% and 8% since Jan. 1.

According to the release, the German subgroup’s financial partners had postponed to June 30 their early termination rights under the existing financing agreement, as well as the repayments due on Dec. 31, 2018 and March 31 until that same date.

The company said the German subgroup also benefits from a bridge financing from Glencore International AG, and the due date for that financing was extended until June 30 for an amount of €21.3 million, corresponding to the German subgroup's projected cash requirements until that date.

The financial partners are now analyzing their position in light of the change in cash requirements, the release said.

Based in Suresnes, France, Recylex is a European group specialized in lead and plastics recycling, zinc recycling and the production of special metals, primarily for the electronics industry.

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