Ferroglobe Announces Discussions with Ad Hoc Group of Noteholders and Key Financial Partners

Rhea-AI Summary

On November 25, 2020, Ferroglobe entered confidentiality agreements with noteholders regarding its 9.375% Senior Notes due 2022. The discussions focus on obtaining $100 million in additional liquidity through a recapitalization plan, which includes $60 million in new senior notes and $40 million in equity funding. This initiative aims to extend the debt maturity profile and align stakeholders' interests. The CEO emphasized this as a pivotal moment, enhancing the company's balance sheet and operational flexibility. However, success in securing funding remains uncertain.

Positive

• Proposed recapitalization includes $100 million in additional liquidity to support strategic plans.
• $60 million in new super senior notes and $40 million in equity funding are expected to strengthen the balance sheet.
• The plan proposes a significant extension of the debt maturity profile.

Negative

• No assurance that discussions with stakeholders will successfully yield new funding.
• Potential refinancing risks remain despite ongoing negotiations.

LONDON, Feb. 01, 2021 (GLOBE NEWSWIRE) -- On November 25, 2020  Ferroglobe PLC (the “Company”) entered into confidentiality agreements (the “Confidentiality Agreements”) with certain holders (the “Ad Hoc Group of Noteholders”) of the 9.375% Senior Notes due 2022 (the “Notes”) issued by the Company and Globe Specialty Metals, Inc., to facilitate discussions addressing the maturity of the Notes and the introduction of further capital to the Company. In connection with the discussions, the investor presentation posted on the Company website, www.ferroglobe.com, was provided to the Ad Hoc Group of Noteholders. The discussions with the Ad Hoc Group of Noteholders have been constructive and the Company is aiming to conclude them shortly. The key highlights of the potential financing arrangements being discussed between the AHG and the Company are as follows:

• A major recapitalization of the business with $100 million of additional liquidity which guarantees sufficient funding to implement the Company’s strategic plan
  • $60 million of new super senior notes provided by existing Noteholders
  • $40 million of new equity funding
• Significant extension of the Company’s debt maturity profile as a result of a par exchange of the Notes with new senior secured notes with a 5 year tenor
• Equity allocation of 3.75% to all supporting holders of the Notes facilitating greater alignment of all stakeholders with management on strategy and long-term value creation
  

Please see the presentation for more details on the proposed transaction. The Company is negotiating with key stakeholders, including its largest shareholder Grupo Villar Mir, S.A.U., the injection of equity that is required to implement the proposed plan and is aiming to enter into a binding agreement with the Ad Hoc Group of Noteholders and equity providers reflecting the outcome of the discussions as soon as possible (although no assurance can be made that the discussions will be successful or that the new funding will be implemented).

Marco Levi, the Chief Executive Officer of Ferroglobe, commented: “Today’s announcement marks an important milestone for the Company. The contemplated financings offer Ferroglobe a stronger balance sheet and incremental capital which, in turn, provide a sound foundation for transforming the Company. The positive dialogue we are having with the financing parties is also an important validation of the turnaround plan we have set forth for Ferroglobe, and demonstrates the confidence of the financial community in our strategy and ability to create value for all stakeholders. We certainly look forward to maintaining this momentum and moving swiftly towards agreeing the final terms of the proposed financings.”

Beatriz García-Cos Muntañola, the Chief Financial Officer of Ferroglobe, commented: “As we have highlighted for some time, the Company has been diligently evaluating various refinancing options to address its senior notes, alongside raising incremental capital. We thank the efforts of the Ad Hoc Group of Noteholders, along with potential new financing partners, for their constructive dialogue of the past few months. Collectively we are working towards a comprehensive financing that eliminates near-term refinancing risks, providing greater operational flexibility, and secures cash for the implementation of our plan. We are focused on quickly advancing the discussion to the next phase and will provide the market with an update in due course.”

About Ferroglobe

Ferroglobe is one of the world’s leading suppliers of silicon metal, silicon-based and manganese-based specialty alloys and ferroalloys, serving a customer base across the globe in dynamic and fast-growing end markets, such as solar, automotive, consumer products, construction and energy. For more information, visit http://investor.ferroglobe.com.

Forward-Looking Statements

This release contains “forward-looking statements” within the meaning of U.S. securities laws. Forward-looking statements are not historical facts but are based on certain assumptions of management and describe Ferroglobe’s future plans, strategies and expectations. Forward-looking statements often use forward-looking terminology, including words such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “forecast”, “guidance”, “intends”, “likely”, “may”, “plan”, “potential”, “predicts”, “seek”, “will” and words of similar meaning or the negative thereof.

Forward-looking statements contained in this press release are based on information currently available to Ferroglobe and assumptions that management believe to be reasonable but are inherently uncertain. As a result, Ferroglobe’s actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements, which are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond Ferroglobe’s control.

All information in this press release is as of the date of its release. Ferroglobe does not undertake any obligation to update publicly any of the forward- looking statements contained herein to reflect new information, events or circumstances arising after the date of this press release. You should not place undue reliance on any forward-looking statements, which are made only as of the date of this press release.

INVESTOR CONTACT:
Gaurav Mehta
Executive Vice President - Investor Relations
investor.relations@ferroglobe.com 

MEDIA CONTACT:
Cristina Feliu Roig
Executive Director – Communications & Public Affairs
corporate.comms@ferroglobe.com 

FAQ

What is the recapitalization amount discussed by Ferroglobe on February 1, 2021?

Ferroglobe is discussing a recapitalization plan worth $100 million.

What are the key components of Ferroglobe's financing arrangements?

The financing arrangements include $60 million in new senior notes and $40 million in equity funding.

What is the current status of Ferroglobe's 9.375% Senior Notes due 2022?

Ferroglobe is in discussions with noteholders to address the maturity of these notes.

What impact could the financing arrangements have on Ferroglobe's debt maturity?

The arrangements aim to significantly extend Ferroglobe's debt maturity profile.

Is there any guarantee for the success of Ferroglobe's financing negotiations?

No assurance can be made that the discussions with stakeholders will be successful.