UPDATE 1-CSN cash crunch eases as it refinances 2016, 2017 bank debt

jueves 3 de septiembre de 2015 20:06 GYT
 

(Recasts with CSN announcing extension on debt repayment in a deal with Caixa Econômica Federal; adds background on CSN's financial difficulties)

RIO DE JANEIRO/SAO PAULO, Sept 3 (Reuters) - Brazilian steelmaker Cia Siderurgica Nacional said on Thursday it extended repayment of 2.57 billion reais ($687 million) of loans as it rushes to ease looming debt payments amid a decline in steel prices and demand and a weakening of Brazil's currency.

Under terms of a deal with Brazilian state-owned bank Caixa Econômica Federal, CSN will be able to repay debt originally due in 2016 and 2017 in a series of equal payments between 2018 and 2022, CSN said in a securities filing.

CSN is also in talks with state-run Banco do Brasil SA to renegotiate loans, also due in 2016 and 2017, in an amount close to the loans in the deal with Caixa Econômica, two sources with direct knowledge of the discussions told Reuters on Thursday.

The Banco do Brasil deal, also extending repayment, could be announced as early as next week, one of the sources said. Both sources requested anonymity because the talks are still under way. CSN declined to comment.

Taken together, the Caixa and Banco do Brasil accords will do much to ease the pressure of 7.4 billion reais of CSN loan payments coming due in 2016 and 2017, or more than a quarter of the company's long-term debt.

CSN moved to refinance its debt after a plunge in the price and demand for steel and the value of Brazil's currency, the real, against the U.S. dollar. The weaker steel prices undermined revenue, and the weaker real caused the value of CSN's foreign debt to jump 12 percent in the 12 months ending June 30.

CSN posted a net loss of 614.6 million reais in the second quarter. Earnings before interest, taxes, depreciation and amortization, a key measure of a company's ability to generate cash from operations and to pay debt, fell 39 percent to 801 million reais in the quarter.

Debt excluding cash holdings reached 5.6 times EBITDA in the second quarter compared with 2.7 times EBITDA a year earlier.

($1 = 3.74 Brazilian reais) (Reporting by Alberto Alerigi and Jeb Blount; Additional reporting by Guillermo Parra-Bernal; Editing by Lisa Shumaker and Leslie Adler)