logo

La Seda must split under proposed refinancing deal

By: Richard Higgs
EUROPEAN PLASTICS NEWS

May 1, 2013

BARCELONA, SPAIN — Spanish PET and packaging group La Seda de Barcelona (LSB) announced it has reached an outline deal with banks coordinating its syndicated loan in the process of renegotiating its debts.

Based on a refinancing proposal put forward by the loan coordination committee, the "tentative" agreement must still be approved by a majority of the group's lenders before it is confirmed, the Catalan company said in a statement to CNMV, Spain's stock market regulator.

Key terms of the deal mean that Barcelona-based LSB must restructure the industrial group, with financial and operational separation of its successful APPE packaging business from the PET polymer and recycling divisions.

LSB must agree to restructure its senior or secured debt which would be implemented through a court-approved Scheme of Arrangement in the United Kingdom. In addition, a super senior credit facility of 30 million euros would be granted.

"The company feels that this agreement would guarantee the industrial group's continuity, while permitting it to expand its core packaging business, ensuring the necessary investment in order to boost its competitiveness and growth," said the board vice chairman José Luis Morlanes in the SE statement.

Now it is up to lenders and LSB's shareholders to back this deal in view of the failure of the last capital plan submitted by the Spanish group.