Brazil’s Unigel, creditors reach agreement on terms of two extrajudicial plans

By Sarah Lizee

Olympia, Wash., April 17 – Unigel Participacoes SA announced that it has reached an agreement on the main commercial terms of its two consensual extrajudicial reorganization plans filed on Feb. 20 with a bankruptcy court in Sao Paulo, Brazil, according to a Wednesday press release.

The company said the agreement followed conversations with some holders of the senior notes due 2026 issued by Unigel Luxembourg SA and other stakeholders that are in support of the plans.

“The detailed commercial terms are an important step towards the goal of obtaining the support of creditors required for the confirmation of the EJ plans,” the company said in the release.

According to the term sheet, financing creditors under both plans will receive HoldCo equity interests that afford them rights (both in aggregate economics and governance) as a 50% shareholder, and Cigel Participacoes SA will retain the remaining 50%.

Seven initial directors will be named and appointed by HoldCo’s general shareholders’ meeting. Three will be nominated by Cigel, three will be nominated by the financing creditors, and one will be nominated jointly by Cigel and the financing creditors.

Management will be appointed by a simple majority of the board of directors.

At least $120 million senior secured notes due December 2027 will be issued at par under the plan.

Brazilian reais-denominated senior secured notes due December 2027 will also be issued at par.

Interest on both the dollar and Brazilian reais notes will be 13½% per year, or 15% per year PIK. The PIK toggle will be available through June 2025.

New dollar-denominated second-lien notes due 2028 will be issued at par. Interest will be 11% per year, or 12% per year PIK. The PIK toggle will be available through December 2025.

The company will also issue Brazilian reais-denominated senior secured second-lien debentures due December 2028 at par. Interest will be 11% per year, or 12% per year PIK. The PIK toggle will be available through December 2025.

Dollar-denominated junior unsecured convertible notes due December 2044 and bearing interest at 15% PIK for life will be issued at par.

Unigel is a Brazilian commodity chemical producer.

© 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.