Celsa Group already has the SEPI’s yes to obtain an oxygen balloon of 550 million euros in the form of credits, but that approval will be of little use if it does not first close an agreement with its creditors. Last week both parties met and there is already a proposal on the table, according to sources familiar with the negotiations. The steel group of the Rubiralta family has transferred to the funds that have the bulk of its debt that they assume 50% write-offs, for an amount of 1,100 million euros over the 2,200 million they have between participating loans (1,400 million) and jumbo (800 million). The owner family, for its part, would inject 50 million to reinforce the social capital and would maintain 100% of the company.
The positions are distant because the funds that from 2018 bought the debt at great discounts from the banks (Cross Olean, Apollo, Golden Tree, Sculptor, Goldman Sachs or CVC) believe that the effort is uneven. And that Celsa has not tried to negotiate until now, when it has received the SEPI’s approval of a request that it made a year and a half ago. Sources close to the company refuse to talk about haircuts and point out that what they intend is to change the financial scheme of the group. For this it is necessary that the balance sheet reflects “the real value of the debt”. That is to say, that the 2,200 million credits are transformed into a figure close to the value paid by the funds.
The problem now lies in the fact that these talks could have entered a race against the clock after the European Commission has decided to close the exceptional public aid window as of June 30 due to the coronavirus crisis. And although the rest of the bailouts agreed by SEPI have not had to cross the Spanish border, in the case of Celsa it will have to because one of the two loans to which it aspires is participatory (convertible into company shares) and exceeds 250 million euros (270 million).
Being willing to grant 550 million euros, the Spanish Society of Industrial Participations (SEPI), which reports to the Ministry of Finance, considers Celsa a strategic group for the Spanish economy and that the financial problems it is experiencing are related to the pandemic . The group argues that they fulfilled their commitments to creditors until the state of alarm arrived in March 2020, their orders fell and with them the income to be able to meet the debt payments. Since then, it accumulates unpaid interest for a value of 350 million. And in his backpack there is also another credit with which he finances his working capital for an amount of more than 500 million euros, whose lenders must also give their yes to the SEPI proposal.
From the outset, the State has shown its intention to help Celsa out of the current situation, but it wanted its effort – this is the largest of all the loans that thirty companies have demanded – to be matched by the company and of the creditors, with the cleaning of part of the existing liabilities in the balance sheet. Celsa has long defended that the book value of debt controlled by the funds does not correspond to what they paid for them to Santander, CaixaBank, BBVA or Sabadell. When they began to buy these contracts, they did so with discounts that reached percentages of up to 80% in some cases. Therefore, Celsa concluded that the value of its real debt should be updated.
The Rubiraltas are convinced that the company is fully prepared to face the new era of green steel mills because it has already made a good part of the necessary transformation. They defend that they do not depend directly on the rise in raw materials because more than 90% of the material they use to produce comes from recycling and that they will not bear the costs of the CO₂ rights of their competitors because they have transformed their ovens to electrify them, although the increase in prices has become an added problem on their way.
He knows in depth all the sides of the coin.
Sources close to some of the funds trust in the “rescue” of Celsa by SEPI and say that they “continue to evaluate the proposal”, but denounce that Celsa’s position is one of immobility in the face of any other option.
Exclusive content for subscribers
read without limits