MOSCOW (MRC) -- Spanish plastics bottle maker La Seda de Barcelona will ask shareholders to approve its debt refinancing plan and allow it to withdraw from insolvency proceedings on Wednesday, a person close to the company with knowledge of the plan told Reuters.
La Seda said in a stock market notice on Tuesday that it had reached a preliminary deal to refinance 75% of its syndicated debt with creditors, after saying last week it would file for insolvency.
The company should now be able to restructure EUR235 million (USD307 million) of syndicated debt following the agreement, with over half its creditors signing up to refinance 75.4% of the debt.
"That means all the legally required thresholds to implement the company's syndicated debt refinancing proposal have been reached," La Seda de Barcelona said in a statement.
"If the process to withdraw from insolvency proceedings is approved tomorrow, (biggest creditor) Anchorage's plan to convert the debt into capital will go ahead, but that has to be decided at tomorrow's meeting," the person said.
The Catalonia-based company, which makes bottles in Europe, Turkey and North Africa, has been in talks with creditors since last September after high material costs and excess supply of the PET plastic containers it makes put pressure on the business.
As MRC wrote before, Invista Performance Technologies has acquired from La Seda de Barcelona SA intellectual property relating to its leading purified terephthalic acid (PTA), polyethylene terephthalate (PET) and related process technologies, including the full rights to exclusively license the technologies in the region comprising Europe, the Middle East and Africa.
The firm, whose biggest creditor is U.S. hedge fund Anchorage, said last week it would start insolvency proceedings after failing to get the 75 percent of creditors it needed on board with its refinancing plan.
La Seda had 600 million euros of debt at the end of 2012, according to company filings, and has EUR462 million in syndicated loans from banks, according to Reuters loan market news and analysis service RLPC.
A source close to the talks had said last week that EUR235 million of that syndicated debt needed to be restructured.