InterCement Kicks Off $4 Billion Out-of-Court Restructuring

Published 17 September 2024, 13:06:54.378 GMT
By Vinicius Andrade

(Bloomberg) -- Distressed cement maker InterCement Participacoes SA reached an agreement with some of its creditors
to begin an out-of-court restructuring.

The Brazilian firm filed a plan to restructure about 21.9 billion reais ($4 billion) in debt to a Sao Paulo court Monday.

The proposal has the support of more than a third of its debt holders, according to a regulatory filing Monday.

The filing comes just a few months after the company obtained temporary protection from creditors amid a mediation process and talks for a potential sale to steelmaker Cia Siderurgica Nacional SA.

InterCement was hit by high interest rates in Brazil, its biggest market, and efforts to unload African assets weren’t enough to allay fears over its capital structure, deemed “unsustainable” by Fitch Ratings. 

The plan depends on certain conditions including a possible M&A transaction that’s being discussed, InterCement said in the filing.

While no additional information was provided regarding the sale process, “it appears that there has been progress in the discussions,” Lucror Analytics analyst Lorena Reich wrote in a note, changing her recommendation on the notes to hold from sell. “This could limit further downside on the bonds.”

The cement maker’s bonds last traded near 61 cents on the dollar, according to Trace data.

--With assistance from Maria Elena Vizcaino and Giovanna Bellotti Azevedo.