Trafigura, Swiss trading firm is planning to acquire Nyrstar, Belgium based zinc and lead producer to resolve Nyrstar’s financial hurdle as a part of complex debt restructuring deal.
The world’s second largest zinc producer plunged into a lock-up agreement with Trafigura. The latter has issued a proposal to exchange for perpetual securities and other capital to Nyrstar’s creditors. Until now Trafigura owns 24.42% of Nyrstar.
The creditors constitutes to 44.8% of Nyrstar’s debt in aggregate, has signed the agreement. To proceed with recapitalization, the company needs the approval of 75% of its creditor. Nyrstar’s bank lenders have stipulated the support for the settlement but have not provided support so far. Under the terms of agreement, Trafigura will become the owner of 98% Nyrstar’s shares. The former will provide $250mn in credit to the Nyrstar to ensure the operations continue during the transitional period.
One European trader said to Argus, "It's too early to say what Trafigura will do". "It had to do something to avoid losing everything. It has to save what it can save."
Nyrstar’s zinc output was 1.06mt last year to 4% this year while lead output drop by7% to 160,000t. Nyrstar has mining, smelting and other operations in Europe, the Americas and Australia.