Vallourec Undertakes Major Financial Restructuring

World’s leading seamless pipe maker Vallourec announced that it has reached a major step in its financial restructuring, with an agreement in principle with
Vallourec Undertakes Major Financial Restructuring
VallourecDanieli

World’s leading seamless pipe maker Vallourec announced that it has reached a major step in its financial restructuring, with an agreement in principle with its main creditors. This agreement meets the Company's objectives to rebalance its capital structure by reducing its debt and securing the necessary liquidity that will enable the Company to implement its strategic plan in a volatile market environment. The Agreement in Principle 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. It involves a EUR1.8 billion debt reduction via a shareholders' rights issue, creditors taking equity stakes and a write off by commercial banks of EUR 169 million in debt.

The implementation of this plan, expected at the end of the first semester, after obtaining the required approvals, will result in the entry of two new reference shareholders, Apollo and SVPGlobal. Investment funds Apollo Global Management Inc, holding between 23.2% and 29.3% of the share capital and Strategic Value Partners LLC, holding between 9.7% and 12.3% of the share capital, will become Vallourec's two largest shareholders. Steelmaker Nippon Steel will reduce its holding in Vallourec's share capital to 3.4% from the current 14.56% and will also sell back to Vallourec the 15.4% stake held by itself and Sumitomo Corp. in Brazilian joint venture Vallourec Solucoes Tubulares do Brasil.

The Agreement in Principle would enable the Company to consolidate its balance sheet and reduce its debt and interest expenses to a suitable level that takes into account the consequences and uncertainties related to the Covid and oil markets crisis. This new favorable framework, combined with the strong structural measures initiated during financial year 2020, would enable the Company to implement its strategic plan to strengthen its market position.

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