Banks sell Stemcor's loans to hedge funds-bankers

December 9
3:43 PM 2013

Lenders to troubled Stemcor, the world's largest steel trader, have been selling their exposure to hedge funds and distressed debt specialists before a key restructuring deadline on December 13, banking sources said on Monday.

Banks have taken a hefty loss to sell around $250 million of privately-owned Stemcor's loans to aggressive debt investors since the summer at 40-52 percent of face value, the bankers said.

A new $30 million block of Stemcor's loans was put up for sale last week and another $34 million block traded in November at around 52 percent of face value, the sources said.

Stemcor was not immediately available to comment.

Privately-owned Stemcor had to put a standstill agreement in place in June after failing to refinance a maturing $850 million, 364-day loan earlier this year.

Under a standstill agreement lenders agree not to ask for repayment and work with the company to restructure the debt or extend its maturity.

The company won a further 100-day extension on the standstill agreement in late September, which bought time to finalise a restructuring, repayment and refinancing plan on two loans totalling $1.25 billion.

Stemcor has to agree the restructuring plan, which is being led by PwC with Stemcor's bank co-ordinating committee, which includes ABN AMRO Bank, HSBC, ING, Natixis and Societe Generale.

The restructuring plan will be implemented in 2014/15.

As part of the restructuring plan, Stemcor is trying to conclude the $1.3bn sale of its Indian ore assets through an international auction by December which initially attracted opposition from ICICI Bank. 

© 2022 VCPOST, All rights reserved. Do not reproduce without permission.


Join the Conversation

Subscribe to VCpost newsletter

Sign up for our Deals of the Day newsletter.
We will not spam you!

Real Time Analytics