Unigel, the struggling Brazilian chemical and fertilizer maker, obtained approval from a majority of creditors, including Pacific Investment Management Co. (PIMCO), for its out-of-court restructuring plan, according to Bloomberg, citing people familiar with the matter. Unigel didn’t immediately reply to a request for comment.
Holders of more than 50% of its debt backed the proposal, according to the people, who asked not to be identified because they are not authorized to speak about it. The company had until May 20 to gather support from more than 50% of creditors and avoid a bankruptcy filing (GM Feb. 23, p. 31).
Unigel skipped the payment of coupons on its dollar and Brazilian real-denominated notes amid plummeting earnings. Losses piled up after lower prices of urea and ammonia pressured its operations, leading it to breach covenants on its bonds, which include maintaining debt levels low enough relative to a measure of earnings.
The plan, first presented in February, originally had the backing of PIMCO, DoubleLine Capital, Amundi SA, Banco BTG Pactual SA’s asset-management unit, Moneda, Verde Asset Management, and Vontobel Asset Management.
Only certain financial creditors will have their claims restructured under the plan, Unigel said earlier this year. The proposal aims at restructuring about 3.9 billion reais ($763 million) in existing debt.
The company was founded by Henri Slezynger and is one of the main fertilizer makers in an economy that is 25% agribusiness. The family, which owns Unigel through a holding company, agreed to give up its controlling stake as part of the restructuring.