Metalcorp Group S.A. reaches agreement on the details of the bond restructuring and calls noteholders of the 2021/2026 Notes to vote

Metalcorp Group S.A. reaches agreement on the details of the bond restructuring and calls noteholders of the 2021/2026 Notes to vote

Luxembourg, 2 November 2023 – Metalcorp Group S.A. herewith informs the holders of its EUR 69.9 million 9.00% notes due 2023 (ISIN: DE000A19MDV0) (the “2023 Notes”) and the EUR 300 million 8.50% notes due 2026 (ISIN: DE000A3KRAP3) (the “2026 Notes”, and together with the 2023 Notes, the “Notes”) that it has reached an agreement with the 2023 Notes common representative, members of an ad-hoc group composed of holders of the 2026 Notes representing approx. 40% of the outstanding nominal amount of the 2026 Notes, certain holders of the 2023 Notes, and Ferralum Metals Group S.A. (“Ferralum”) on the final terms for the restructuring of its Notes. A corresponding lock-up agreement has been signed which, inter alia, secures the support of the ad-hoc group in the vote of the holders of the 2026 Notes yet to be called.

The restructuring of both Notes will follow the general terms already agreed by the 2023 noteholders in their second noteholders’ meeting held on 16 June 2023 and has been further refined in terms of the initially provided debt amount ranges for the various instruments:

• The holders of both Notes will have the option to contribute new money to the former aluminum and bulk and ferrous business of Metalcorp (i.e. BAGR group, the “European Business”) which has been sold to Ferralum, a company owned by the management of the European Business, in May 2023. The new money will be raised through the issuance of one new secured bond in the nominal amount of EUR 12.5 million by a subsidiary of Ferralum against payment of an issue price at par subject to an original issuance discount of 20% (“New Money Notes”). Holders subscribing for New Money Notes will further receive an allocation (based on certain exchange ratios) in (i) one new secured bond with a nominal amount of EUR 66 million to be issued by Ferralum (the “Ferralum Notes”) plus (ii) two new bonds issued by a newly established subsidiary of Metalcorp (“MCG New HoldCo”) with a nominal amount covering the remaining amounts outstanding under the Notes plus accrued interest, each without payment of an issue amount (the “New Metalcorp Notes”). The debt instruments of the European Business were sized on the basis of a debt capacity analysis that is part of a restructuring opinion provided by FTI-Andersch AG. For purposes of the restructuring opinion, the projections for the European Business have been adjusted as compared to the independent business review that formed the basis for the indicative amounts included in the 2023 noteholders’ resolution.

• The New Money Notes will be issued together with equity interests in a newly established company holding (indirectly) 49% in Ferralum (“Equity Instruments”) and, thus, the European Business. The Equity Instruments entitle their holders (in aggregate) to a preferred equity return of EUR 7.5 million.

• Holders not exercising their option to contribute new money to the European Business will by default receive a guaranteed allocation (based on certain exchange ratios) in the Ferralum Notes and the New Metalcorp Notes.

• The exact exchange ratios for both Notes will be disclosed in a separate investor presentation that will be available on the website of Metalcorp Group S.A. and in the materials for the vote of the holders of the 2026 Notes. Noteholders subscribing for the New Money Notes will benefit from a higher weighting in the Ferralum Notes and the New Metalcorp Notes.

• The New Metalcorp Notes will be non-recourse to the European Business and will not provide for any amortisation payments of their nominal amount but will be serviced by MCG New HoldCo only with the proceeds from the direct sale of, or similar transactions with respect to, the operating subsidiaries of MCG New HoldCo.

• Following the sale of the shares in BAGR Non-Ferrous Group GmbH to Ferralum, Metalcorp has changed its business model to generate revenue from direct sales or earn-out agreements in respect of its subsidiaries. The first transaction of this kind was the sale of 95% in SBG Luxembourg to a Guinean partner who will further finance the company’s growth and initiate a sale process. Metalcorp expects that it will finalise similar transactions with respect to Tennant Metals and TML. Once the respective subsidiaries have been sold, the net proceeds will be distributed to the holders of the New Metalcorp Notes in lieu of having a regular repayment at a certain date for the New Metalcorp Notes.

The resolutions of the holders of the 2023 Notes on 16 June 2023 and the expected approval of the restructuring by the holders of the 2021/2026 Notes will complete the consensual restructuring and recapitalization of the Company.

The Company will publish a presentation with further details of the agreement and the next steps on its website.

About Metalcorp Group S.A.:
Metalcorp Group is a diversified global service provider in the metals and minerals industry including procurement, marketing, mining and processing of such products. The business activities are divided into the Aluminum and Bulk and Ferrous Sub-Group and the Metals & Concentrates Sub-Group. The 2021/2026 bond (ISIN: DE000A3KRAP3) and the 2017/2023 bond (ISIN: DE000A19MDV0) are traded on the Open Market of Deutsche Börse AG (“Freiverkehr” of the Frankfurt Stock Exchange).

For further information:
Better Orange IR & HV AG
Frank Ostermair, Linh Chung
+49 89 8896906-25
metalcorp@better-orange.de

Metalcorp Group S.A.
Anouar Belli
+352 2799 0145 55
abelli@metalcorpgroup.com