Spanish bottle maker hopes to solve debt insolvency

BARCELONA - Reuters

Spanish plastics bottle maker La Seda de Barcelona seeks to withdraw from insolvency proceedings. REUTERS photo

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, a person close to the company with knowledge of the plan said.

La Seda said in a stock market notice on June 25 that it had reached a preliminary deal to refinance 75 percent of its syndicated debt with creditors, after saying last week it would file for insolvency.

The company should now be able to restructure 235 million euros ($307 million) of syndicated debt following the agreement, with over half its creditors signing up to refinance 75.4 percent 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.

Production in Turkey

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.

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 462 million euros in syndicated loans from banks, according to Reuters loan market news service RLPC.

A source said that 235 million euros of that syndicated debt needed to be restructured.