Recylex restructures its financial debt

Following the complete loss of control and non-integration of the entities that made up the former German subgroup in May 2020, the Recylex Group will be reduced to the next activity with the new composition.
-Lead segment: Used lead-acid battery recycling activities of Recyrex SA (Villefranche-sur-Saône and Escaudoeuvres plants),
-Plastic segment: C2P SAS polypropylene waste recycling activities,
-Other activities: Recylex SA holding company activities, including equity method of 50% stake in Recytech SA
“Therefore, the consolidated revenues announced as of September 30, 2021 are limited to the activities of the Recylex Group in the new composition, and the consolidated revenues announced as of September 30, 2020 include the previous German Revenue for the entities in the subgroup was included. The date of deconsolidation, “Recylex explains.

Therefore, as of September 30, 2021, consolidated sales were € 67.4 million.

The lead segment accounts for 89% of consolidated sales as of September 30, 2021 and includes sales from the activities of Recylex SA’s two used lead-acid battery recycling plants. Its sales reached 59.8ME on September 30, a significant increase (+ 68%) compared to sales by similar criteria for the same period in 2020. The plastics segment accounted for 11% of consolidated sales as of September 30, 2021. This is about the activities of C2PSAS. Its sales reached 7.4ME on September 30, 2020, a significant increase (+ 25%), similar to sales on September 30, 2020. This change is primarily explained by the impact of the SARS-CoV-2 health crisis, which temporarily suspended C2PSAS activity in the second quarter of 2020.

Debt restructuring

As of September 30, 2021, the company’s net financial obligations (excluding IFRS 16 lease obligations) were € 48.9 million. It is classified as follows:
-In 2014, a loan of 16 million euros (17.9 million euros including capitalized interest) was executed with Glencore International AG. Recylex SA benefits from a temporary and conditional waiver of Glencore International AG’s right to declare immediate repayment of a loan until January 31, 2022 at the latest.
-Debt related to fines from the 25.3 ME European Commission, including suspended installment interest. We temporarily stopped paying fines in September 2020 and began discussions with the European Commission. The unsettled maturity as of September 30, 2021 was € 1.8 million.
-Return to the good luck clause of € 4.1 million under the 2005-2015 continuity plan. This debt was paid € 2.6 million as of September 30, 2021 and Glencore International AG is the main creditor of € 2.5 million. Recylex SA is subject to the right to declare immediate payment of this obligation from Glencore International AG until January 31, 2022, subject to the same provisional waiver of the right to declare immediate payment of a 16,0 ME loan. I got a waiver. Moreover;
-Rescheduled debt due to 2026 due to the € 5.1 million Recylex SA continuity plan to Glencore International AG.

In addition, Recylex’s net financial debt may be affected and exacerbated by the decision of the Marseille Administrative Court on May 26, 2021. First, the Marseille Administrative Court ordered Recyrex SA to pay SNCFRéseau individually in collaboration with Retia. Provisional € 5.7 million for the restoration of the public railway domain near the Estak sector. Both companies will also have to pay a surplus of up to € 63.3 million as SNCFRéseau demands funding. Recylex SA appealed this decision on 22 July 2021 as it will challenge this decision by any law that may be useful in both the proposal and its enforceability. In addition to this appeal, Recylex SA suspended executions on October 29, 2021.

As of September 30, 2021, Recylex SA’s cash and cash equivalents were € 3.5 million.

To be on the safe side, Recyrex SA faces a certain number of debts and debts inherited from the industry’s past. Some of them are as above. The amount and maturity of these liabilities and liabilities are disproportionate to the Group’s current scope of activity. Despite the current favorable conditions of lead prices and sustained demand from the Nordenham Smelter for secondary materials from the disposal of used lead-acid batteries, the Group’s ability to generate funds has settled these debts. It remains incompatible with and is passive.

Recylex SA embarked on a debt restructuring process a few months ago with the goal of adapting the amount and schedule of debt to its cash-generating capacity.
Following discussions with Group’s key creditors, Glencore International AG and the European Commission, Recyrex SA has begun the process of asset disposal. Priorities are job maintenance and debt restructuring related to these activities.
The progress of these various ongoing processes highlights the following aspects:
-If a 50% stake held by Recytech SA is sold, the sale price will be full up to the amount of commitment Recylex SA has made to Glencore International AG under the first and second pledges of the shares. Will be absorbed by. of Recytech SA As of September 30, 2021, the commitment amount was € 60.7 million. Therefore, without significant debt amortization, the issue of debt restructuring of other creditors remains complete and complete.
–Recylex SA has received a statement of interest from several players working in companies close to recycling used lead-acid batteries and polypropylene. We continue to discuss with these interested players to allow partial or total resumption of recycling activities within the framework of a competitive and structured relocation process. Nonetheless, given the level of indicator offers already received, it is clear that most of the existing debt needs to be subject to very significant amortization by creditors.
-In addition to debt restructuring, Recyrex SA has also begun the process of selling a closed L’Estaque site that has been the subject of an environmental remediation program for several years. Given the suggestive offers received so far, the possibility of selling the site will not allow you to participate in the repayment of debt for the amount of remaining rehab costs.

The outcome of debt restructuring remains highly uncertain as it depends on the outcome of the planned asset disposal and whether the creditor is willing to accept the amortization of large amounts of debt. To be on the safe side, as of June 30, 2021, the company has closed its semiannual account for 2021 and is unable to publish its semiannual financial report.
Thomas Hüser, Chairman of the Board of Directors of Recylex SA, said: Uncertain Restructuring If no agreement is reached with the creditor regarding a significant waiver of debt, the consequences of debt payments will require Recylex SA to declare suspension of payments in its current state. Cash flow forecast “.