GVO races to raise funding after missed coupon

miércoles 14 de enero de 2015 17:48 GYT
 

By Davide Scigliuzzo

NEW YORK, Jan 14 (IFR) - Brazil's Grupo Virgolino de Oliveira (GVO) might have only a few weeks left to raise new cash and finalize an agreement with creditors that could stave off bankruptcy, after it missed a coupon payment on Tuesday.

Hit by a slide in sugar prices, the cash-strapped sugar and ethanol producer has been in discussions with creditors and potential new investors for months, as it seeks to strengthen its capital structure and reduce its debt burden.

On Tuesday, GVO missed a USD7m coupon payment on its 10.875% USD135m senior secured notes due 2020, which along with the company's unsecured debt, have been trading in distressed territory since October.

With two more interest payments looming over the next few weeks - USD16m due January 28 on USD300m of 10.5% 2018s and USD18m due February 9 on USD300m of 11.75% 2022s - pressure is building for GVO to strike a deal with investors.

The unsecured 2018s were spotted trading on Tuesday at around 6 cents on the dollar, while the secured 2020 were being quoted at wide bid-offer spread of 20 to 40 cents on the dollar.

EXTRA CASH

The company has been discussing with bondholders a debt-for-equity restructuring plan that would see the family owners end up with just a 15% stake in the business, according to a person with knowledge of the situation.   Continuación...