Usiminas reaches debt extension agreement with creditors
Embattled Brazilian steelmaker Usiminas said Wednesday in a regulatory filing it had struck a debt-restructuring deal with local banks and debenture holders.
The agreement involves restructuring the equivalent of 75% of its debt.
Under the deal, the banks – BNDES, Banco do Brasil, Itaú Unibanco Holding and Bradesco – agreed to extend maturities over the next 10 years with a three-year grace period on the principal.
But the deal depends on the full approval of a recently announced 1bn-real (US$288mn) capital increase, the filing said.
The capital increase was approved by the company's board on March 11, but at the time the company's controllers disagreed over its terms.
Fitch said in late-March that Usiminas was facing an unmanageable liquidity position and unsustainable net leverage, and added that the steelmaker's cashflow was expected to remain under pressure mostly on the progressive deterioration of domestic and worldwide steel markets, a "brutal" operating environment and the company's unprofitable iron ore business.
Usiminas, the second largest Brazilian steel group, has been trying to sell non-core assets for months to recover some financial strength.
The company's debt profile consists of 1.9bn reais of maturities due in 2016 and 1.8bn reais of maturities due in 2017.
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