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(Bloomberg) — French chemicals company Kem One SASU has obtained €30 million ($35.6 million) of fresh debt from its existing lenders as it continues to navigate a downturn in its market.
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The firm owned by Apollo Global Management announced the new money in a presentation to investors on Saturday and seen by Bloomberg. Kem One previously obtained a €200 million loan from Monarch Alternative Capital and Arini Capital Management last March, and the newly announced debt has the same collateral and ranks alongside that loan.
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It has also agreed an additional so-called accordion facility with those lenders, which can be drawn down if needed, according to the presentation.
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Kem One has been grappling with a downturn in the chemicals market. As a PVC producer, it has been faced with higher energy costs as well as increased competition from Asian players. A weak construction market affected demand for the company’s products. The company had also been allocating money to an upgrade — now completed — of its Fos-sur-Mer facility in France.
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Last year, as liquidity got tighter, it replaced its revolving credit facility with the banks with the loan from Monarch and Arini. The company continues to discuss a broader restructuring, and will rely on the new debt to fund itself while these talks go ahead, it said in the update to investors.
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On top of the debt provided by Monarch and Arini, Kem One’s capital structure also includes €450 million high yield bonds maturing in 2028 and issued by vehicle Lune Holdings Sarl. Those notes are currently quoted at around 12 cents on the euro, according to Bloomberg pricing. In October, a set of bondholders banded together in a cooperation agreement, as Kem One’s financial performance declined.
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The company also flagged potential upcoming anti-dumping regulation in Europe, and how it would positively support the turnaround of the business. Kem One, alongside other PVC producers, is filing anti-dumping cases with the European Commission for products imported from Asian markets.
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