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The attempt of the French sugar group Tereos to spread the risk on a loan of 250 million euros obtained earlier this year has not attracted bidders, leaving three major banks creditor exposed, according to sources close to the record.
Tereos, the second largest sugar producer in the world, has struggled to cope with poor market conditions since the end of the EU's production quota regime in 2017, announcing a loss for the second year consecutive this season.
The indebted cooperative group announced in February that it had taken out a € 250 million loan from BNP Paribas, Natixis and Rabobank to repay half of its 2020 loan one year in advance.
Tereos then launched a syndication round with a dozen banks, including other members of its banking pool and new ones, to spread the risk, sources said. The call, for 50 million euros, failed to attract bidders before April 15, they said.
"The group is constantly in dialogue with its financial partners on various financing operations around the world.
The group does not comment on these non-public discussions which, taken in isolation, could give a misleading picture of the group's funding, "Tereos said in an email statement.
The difficult conditions for European sugar producers facing a collapse in prices, but also the high level of indebtedness of society and the poor results expected this year have discouraged potential candidates, said a source.
"The problem here was a significant risk. The proposed pricing has failed to attract banks, "said one source. "It means they'll have to pay more and go somewhere else."
The departure of Group Chief Financial Officer Olivier Casanova, responsible for the presentation of the syndication offer, discouraged potential participants, said the source.
Natixis and BNP declined to comment.
Rabobank was not immediately available for comment.
Tereos' net debt was 2.7 billion euros at December 31, up 4.5% year-on-year, bringing the net debt-to-EBITDA ratio to 4.5 billion euros. adjusted to 8.0 versus 4.1 a year earlier.
Concerns over Tereos' financial health in a difficult sugar market drove the group's bond yields to unprecedented highs at the end of last year, and they have remained high since the company's 8.5% return. Tereos' obligation in June 2023 on Thursday.
The sugar company said in February that it had maintained a financial guarantee of 1 billion euros at 31 December 2018, including an unused 225 million euros reserve facility, despite falling profits. free.
The increase in production after the abolition of production quotas by the European Union and the 40% drop in prices since early 2017 in an oversupplied world market have hurt the profits of several European companies.
Suedzucker, the largest sugar refiner in Europe, said in February that it would stop sugar production in two plants of its French subsidiary Saint Louis Sucre, while its French rival Cristal Union plans to close two more.
Tereos said the group did not plan to close any plants in France.
The group seeks to open its business to partners to stimulate diversification and internationalization.
The process could take two or three years, he said.
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