The offers received by the Company to date are as follows:
- An offer for the Escaudoeuvres and Villefranche-sur-Saône industrial sites and the shares of the subsidiary C2P S.A.S. for less than €2.5 million, allowing the preservation of the business and jobs (60 jobs in total);
- Two offers for the 50% stake in
Recytech S.A. for a total of €40 million, this stake being subject to a first and second ranking pledge in favour ofGlencore International AG ; - Offers valuing the discontinued Estaque site for an amount of less than €0.5 million (on the assumption of environmental rehabilitation obligations taken over by the potential buyer).
This compares with total net debt of €52.2 million, plus provisions for environmental risks and liabilities of €16.2 million2, for a total of €68.4 million. The Company does not expect to receive any further offers in view of the extensive due diligence undertaken to find potential buyers.
This asset disposal process was part of an amicable prevention procedure (conciliation), which has been underway for several months, at the initiative of the Company, and which will end on
In addition, a significant portion of the Group's debt will also become due after
As a result, the Company will be in a state of cessation of payments and is preparing to file for reorganization proceedings (“redressement judiciaire”) before the Paris Commercial Court, under the conditions provided for by law3.
The Company notes that the conditional offer received from
This offer remains subject to an agreement between
If the Court grants the request for the opening of reorganization proceedings (“redressement judiciaire”), this procedure will allow the examination by the Court of the offer received from
As this is the only offer for the industrial sites, the Company will request that
The asset disposal process carried out by the Company since
In the event of the opening of reorganization proceedings (“redressement judiciaire”) it should be noted, however, that, given the importance of the debts and other liabilities, and the low value of the assets resulting from the offers received, the prospects of the adoption of a reorganization plan (“plan de redressement”), in parallel with the envisaged “prépack cession”, remain uncertain.
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The Company reiterates below in more detail the announcements made today:
- Offers received for the Company's assets;
- Inability to present a debt restructuring plan in an amicable framework;
- Examination by the Paris Commercial Court of the offer received for the industrial sites in the context of the asset disposal process ("prépack cession").
1. Offers received for the Company's assets
The Company's only assets to date are the following4:
- The Villefranche-sur-Saône and Escaudœuvres sites for the recycling of used lead-acid batteries, as well as the polypropylene waste recycling business of the subsidiary C2P S.A.S. located at the Villefranche-sur-Saône site;
- the 50% stake in
Recytech S.A. ; - Discontinued mining and industrial sites, including the Estaque site in
Marseille .
Offer for the Villefranche-sur-Saône and Escaudœuvres sites
The structured and competitive sales process conducted by the Company since
This offer from
This offer is likely to promote the sustainability of activities and jobs at sites that are fully committed to the lead and plastic waste recycling economy.
The proceeds from the sale of all the industrial activities being less than €2.5 million, notably because of the significant investments to be made at these two sites, it would not contribute significantly to the restructuring of the Group's debt
At the date of publication of this press release, the offer received remains subject to certain conditions related to the level of the overall amount of the environmental financial guarantees to be provided by the buyer, in accordance with the provisions of articles L.516-1 and L.516-2 of the French Environmental Code. Discussions are currently underway between the Government departments concerned and the potential buyer. Given the nature of these conditions, the Company is not currently in a position to comment on the fulfilment and lifting of these conditions, which are beyond the Company's control.
Offers concerning the discontinued Estaque site
The discontinued Estaque site has been the subject of an environmental remediation program for several years. The Company has received proposals to acquire this site with a tiers demandeur mechanism5 that would allow a significant portion of the remaining remediation costs to be transferred to the buyer. The expected proceeds from the sale would be less than €0.5 million and would not contribute significantly to the restructuring of the Group's debt.
Offers for the stake in
The Company has received indicative offers of up to €40 million for its 50% stake in
2. Inability to present a debt restructuring plan in an amicable framework
Gross financial debt and other liabilities amount to
Summary of known debts and liabilities | |
In millions of euros | |
27.5 | |
25.7 | |
SNCF Réseau / Retia | 2.9 |
Others | 0.3 |
Financial debts | 56.4 |
Rehabilitation of former mining sites and Estaque | 13.4 |
Litigation Metaleurop Nord | 4.0 |
Litigation SNCF Réseau | 8.5 |
Provisions for other liabilities | 25.9 |
Total provisioned debts and other liabilities | 82.3 |
Cash and cash equivalents | 4.2 |
As consequence, the offers received do not provide the Company with sufficient financial resources to consider restructuring its debt.
The imminent expiration and the failure of the current conciliation procedure, as well as the payability of a large part of the debt after
2.1. Significant debt and liabilities inherited from the past
Net financial debt
As of
Debt | Creditors | million euros |
€16 million loan (a) | 18.6 | |
Debt related to the | 25.7 | |
Clawback clause (c) | 4.1 | |
Rescheduled debt from the 2005-2015 continuation plan (d) | 5.1 | |
SNCF Réseau/ Retia SASU (e) | 2.9 | |
Total debt | 56.4 | |
Total available cash | 4.2 | |
Net debt as of | 52.2 |
Financial debt breaks down as follows:
- Loan of €16 million (€18.6 million including capitalized interest) taken out in 2014 with
Glencore International AG . At the end ofDecember 2021 , the Company obtained fromGlencore International AG an extension of the conditional waiver of its right to declare the loan immediately due and payable untilApril 15, 2022 at the latest (previouslyJanuary 31, 2022 ). Given the absence of a debt-restructuring plan in an amicable framework and the expiration ofGlencore International AG's conditional waiver of its right to declare the loan immediately due onApril 15, 2022 , the liabilities corresponding to the accrued interest (€2.5 million) will now become due and payable after that date. As regards the principal, the corresponding liability will now be considered as an unmatured demand liability due toGlencore International AG's right to declare the loan due at any time; - Debt relating to the
European Commission fine of €25.7 million, including interest on suspended maturities. InSeptember 2020 , the Company temporarily suspended payment of the fine in the context of discussions with theEuropean Commission . The outstanding maturities amount to €2.7 million as ofMarch 31, 2021 . The full amount of the fine will become due afterApril 15, 2022 ; - Clawback clause under the 2005-2015 continuation plan for an amount of €4.1 million7. The amounts due under this debt amount to €3.8 million at
December 31, 2021 , withGlencore International AG as the main creditor for €3.5 million. The total amount will become due afterApril 15, 2022 , as the suspension of the due date granted byGlencore International AG will end on that date; - The rescheduled debt, due in 2026, resulting from the Company's continuation plan, for an amount of €5.1 million towards
Glencore International AG ; - An estimated debt of €2.9 million8 in connection with the order by the Marseille Administrative Court ruling to pay €5.7 million to SNCF Réseau in solidum with Retia SASU. Retia SASU, which indicates having paid the full amount called in by SNCF Réseau, i.e. €5.7 million, in
December 2021 , would therefore have a recourse claim against the Company.
These debts are largely attributable to the past of the former Metaleurop Group.
It should be noted in this respect that since 2005 the Company has disbursed nearly €108 million euros for liabilities related to the past, including:
- €42 million under its continuation plan;
- €24 million in compensations paid to former employees of Metaleurop Nord S.A.S. following legal proceedings initiated by them; and
- €42 million for the remediation of former mining sites and the discontinued Estaque site.
Other liabilities
The Company also has a number of environmental liabilities inherited from its industrial and mining past, including:
Provisions | Nature | million euros |
Liabilities for the rehabilitation of former mines (€3.7 million) and the discontinued Estaque site (€9.7 million) | Costs provisioned in the amount of | 13.4 |
Judgment by the Marseille Administrative Court in respect of damage allegedly caused by SNCF Réseau to railway infrastructure (joint and several with Retia SASU) (e) | Amount provisioned [Initial judgment of up to €63.3 million euros on call for funds] | 8.5 |
Litigation Metaleurop Nord S.A.S. | 4.0 | |
Total Provisions | 25.9 |
In view of the offers received to date for the discontinued Estaque site, a possible sale of the site with a tiers demandeur mechanism5 would make it possible, in the event of a sale, to transfer the remediation costs and obligations (€9.7 million) to the buyer. The remaining provisions to be cleared in this case would amount to €16.2 million.
Liabilities resulting from the decision of the Marseille Administrative Court
On
Retia SASU indicates having paid €5.7 million to SNCF Réseau in
A provision of €8.5 million euros has been made in the Company's accounts for this litigation with SNCF Réseau.
2.2. A weakened business model and an activity that does not allow the repayment of existing debts
Since
The Group has sought to reduce its heavy dependence on this quasi-unique customer. However, as the recycling process for used batteries at the two French sites was originally designed as an integral part of the Nordenham smelter's secondary materials recovery chain, it became clear that significant industrial changes in the used battery recycling process would be required before other potential customers and market segments could be targeted.
Despite the efforts undertaken over the past two years, the Company has not yet succeeded in finding significant new outlets for its products from the recycling of used lead-acid batteries, nor in making the industrial changes necessary to address new outlets.
The sustainability of the activity is thus considerably weakened, requiring the takeover by an industrial operator such as
2.3. The offers received do not allow for the repayment or restructuring of debts
The various offers received highlighted the following:
- It is clear that the proceeds from a potential sale of the Group's assets will not be sufficient to effectively support a restructuring of the debt, or even a sufficiently significant portion thereof;
- Without significant debt write-offs, which are unlikely due to the security interests in the Company's assets6, the sale of all the assets would not be sufficient to reduce the Company's debt;
- he valuation process for the discontinued Estaque site has shown that the offers received would only cover the remaining rehabilitation costs and would clearly not contribute to the repayment of the existing debt.
2.4. Failure and expiration of the conciliation procedure and cessation of payments
In order to deal with the difficulties encountered and the level of indebtedness of the Group, the Company had requested the opening of conciliation proceedings, in order to benefit from a confidential and protective framework, conducive to discussions relating to the restructuring of the debt and the assessment of the feasibility of a sale of all or part of the Company's assets and/or activities, with the assistance of a conciliator.
This conciliation procedure was opened by the President of the Paris Commercial Court on
The purpose of this conciliation procedure was to reach an agreement with the financial partners and with any creditors (in particular
By a new order dated
In the absence of an agreement with the creditors, the conciliation procedure, which will end on
The Company will not have sufficient cash flow to meet its liabilities, which will become due as a result of the expiration and failure of the conciliation procedure.
The Company will therefore be obliged to declare its situation of cessation of payments to the Paris Commercial Court and to request the opening of reorganization proceedings (“redressement judiciaire”).
3. Examination by the Paris Commercial Court of the offer received for the industrial sites in the context of the asset disposal process ("prépack cession")
The declaration of cessation of payments will be filed by the Company under the conditions provided for by law.
The Company will keep investors informed of the Court’s decision.
If the application to open Court-ordered reorganization proceedings (“redressement judiciaire”) is granted, the Paris Commercial Court will be asked to examine the offer received from
At the same time, the Company may study the feasibility of a legal solution for restructuring its debt and the continuation (or sale) of its holding company activity or the sale of the related stake in
In the event of the opening of reorganization proceedings (“redressement judiciaire”) it should be noted, however, that, given the importance of the debts and other liabilities, and the low value of the assets resulting from the offers received, the prospects of the adoption of a reorganization plan (“plan de redressement”), in parallel with the envisaged “prépack cession”, remain uncertain.
In view of the above, there are no plans at this stage to resume the listing of
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1 The Latin expression in bonis refers to the situation in which a natural person or legal entity normally has all the rights to its assets.
2
3 Article L631-4 of the Commercial Code.
4 See press releases of
5. Article L. 512-21 of the Environmental Code.
6. As a reminder, the first and second ranking pledges cover certain financial commitments of the Company or its former German subsidiaries to
7. The nominal amount of the better fortunes clause amounts to €19.2 million, of which €17.8 million is owed to
8. Corresponding to 50% of the amount of €5.7 million for accounting purposes, subject to the determination of the exact contribution of each party.
9 See press release of
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Disclaimer: This press release is a non-official translation into English of the press release of the same date issued in French language and is provided solely for the convenience of English-speaking users. This press release should be read in conjunction with and construed in accordance with French law. Disclaimer: This press release may contain forward-looking statements that constitute either trends or objectives and should not be construed as forecasts of results or any other performance indicator. This information is by its nature subject to risks and uncertainties, as described in the Company's Annual Report available on its website (www.recylex.fr). More detailed information on
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Raw materials from urban mines
For more information about the
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Press & Investor contact: T +33 (0)158 47 29 91 | E info@recylex.eu
Administrative office: 79 rue
Attachment
Recylex S.A. - Filing for the opening of Court-ordered reorganization proceedings and the implementation of a disposal plan for the Group's industrial assets (prépack c
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