Tue 11/16/2021 08:51 AM
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A $30 million piece of ED&F Man’s term loan B is up for sale with a target price of 24 to 26, sources tell Reorg. To view the relevant documents linked as well as our EMEA Core Credit team's coverage of thousands of other stressed/distressed debt situations including our Imagina KYC/AML analysis, request a trial here: https://reorg.com/trial

The commodity brokerage and trading business is under stress owing to rising commodity prices affecting derivative contracts. The company’s RCF is quoted in the 85-87 range and its term loan A is quoted in the range of 74 to 76 according to sources. The RCF and term loans are part of a $1.3 billion multicurrency secured facility due 2023. A $200 million borrowing base facility is quoted at 90 to 93 sources said.

ED&F completed a scheme of arrangement in September 2020 narrowly averting a $1 billion maturity wall which it was unable to repay. The restructuring provided the company with an additional $300 million of working capital facilities from lenders and extended maturities by two years with a further extension of one year possible under certain conditions.

All scheme creditors other than those under the 2020 facility were entitled to convert their scheme liability into a new secured term loan or new secured term notes. The term loans and notes are subject to the same covenants and have the benefit of the same security package but the pricing structure differs. However, last-year’s scheme did not sufficiently address the company’s capital structure which remains under stress due to thin margins.

The company's capital structure from September 2020 is below:


















































































































































ED&F Man


09/30/2020

EBITDA Multiple

(USD in Millions)

Amount

Maturity

Rate

Book


$163M Secured RCF Facility due 2021

163.0

Sep-2021


$1.3B Multicurrency Secured Term Loan and RCF due 2023

1,309.0

Sep-2023


Total Secured Bank Debt

1,472.0

10.7x

$184M US Private Placement Fixed Rate Notes due 2023

184.0

Sep-2023


Uncommitted Credit Lines

604.0



Total Other Debt

788.0

16.5x

Lease Liabilities

137.0



Total Lease Liabilities

137.0

17.5x

Total Debt

2,397.0

17.5x

Less: Cash and Equivalents

(540.7)

Net Debt

1,856.3

13.5x

Operating Metrics

LTM Revenue

6,906.0

LTM Reported EBITDA

137.0


Liquidity

Other Liquidity

125.0

Plus: Cash and Equivalents

540.7

Total Liquidity

665.7

Credit Metrics

Gross Leverage

17.5x

Net Leverage

13.5x

Notes:
The capital structure is on a post-IFRS 16 basis. Cash position excludes $976M of segregated cash related to the customer assets and investment held by Brokerage business on behalf of customers, and $8.3M of restricted cash related to cash deposit for the letter of credit and guarantees. LTM reported EBITDA is calculated as loss before interest and tax plus depreciation, amortization and impairment, which includes impairment losses of relating to a receivable from a joint venture, and assets at Iansa and Ukraine. Total committed amount of RCF is not disclosed. Other liquidity refers to $125M of undrawn facilities.



--Luca Rossi, Connor Lovell
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