PwC restructuring scheme helps protect 2,000 jobs at steel trader Stemcor after lenders agree terms

Published at 10:41 AM on 28 October 2015

As the steel industry finds itself under unprecedented pressure, PwC has announced a deal to help safeguard the jobs of close to 2,000 workers at Moorgate Industries Limited.

Moorgate Industries Limited (“MIL”) is the parent company of the Stemcor group of companies (the “Group”). The Group is one of the world’s largest independent steel traders operating in 45 countries with turnover in 2012 exceeding £5bn.

In April 2013, when PwC was initially engaged by the Group’s lenders the Group had debts of $3.1bn owing to more than 90 global institutions. PwC concluded an initial restructuring in March, which included an innovative trade finance facility structured by PwC.

However, market conditions meant a further restructuring became inevitable.

There has subsequently been significant debt trading and new entrants into the syndicate which has contributed to the complexity and demands of the assignment, but for the last two and a half years PwC has brokered negotiations, including managing the diverse stakeholder group, developing the restructuring solution and crafting the implementation process.

PwC can now announce a Scheme of Arrangement recently approved at the High Court and a series of administration appointments which were needed in order to safeguard the business as the restructuring took place.

The Scheme of Arrangement is supported by 95% of senior lenders and binds all senior lenders into a demerger and refinancing of the business;

Three administrations were required as part of a wider process to restructure the Group, ultimately allowing the business to continue as a going concern.

The wider process involved a restructure of the Group’s debt facilities and a de-merger of the core and non-core businesses.

The conclusion of the restructuring will protect more than 2,000 jobs for the present, allow the core Stemcor trading business to grow and offer the best opportunity for lenders to recover their existing exposures.

Diederick Van Der Plas, global leader of restructuring at PwC, said:

"In a project lasting more than two years, PwC has helped restructure more than $3bn of debt for global steel trader Stemcor.  The team worked closely with the Group and its lenders to structure new, innovative banking facilities and introduced the concept of an ‘anchor shareholder’, providing the opportunity to restore the confidence of the lender community and give the Group stability and a platform for future growth.”

 

Ends

 

Notes to editors

1.        At the beginning of October 2015, Ian David Green, David Kelly and Tony Lomas were appointed as joint administrators of Moorgate Industries Limited (“MIL).

2.        The appointment of administrators was part of a wider process to restructure the Group, involving a restructure of the Group’s debt facilities and a de-merger of the core and non-core businesses.

3.        This restructuring was made possible by a scheme of arrangement approved by the High Court on 30 September 2015. This paved the way for the restructuring process to begin during October 2015 and enables the core business of the Group to continue to trade as a going concern.

4.        David Kelly, Ian Green and Paul Copley were then appointed as joint administrators of Moorgate Industries 1 Limited ("MI1L") (formerly Stemcor Holdings 1 Limited) and Moorgate Industries Loans Limited ("MILL") (formerly Stemcor Trade Finance Limited) by the Companies' directors on 14 October 2015.

5.        The Companies are both part of the Stemcor Group. MI1L is an intermediary holding company of operating subsidiaries. MILL historically provided the treasury function as main borrower for the Group and traded offset agreements.

 

6.        The appointments follow the administration of Moorgate Industries Limited (formerly Stemcor Holdings Limited) on 2 October 2015 as part of the wider financial restructuring assignment involving more than 90 lenders.

 

 

About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

©2015 PwC. All rights reserved

Ends.


Twitter
LinkedIn
Facebook
Google+

About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. © 2016 PwC. All rights reserved

« PwC acquires the business of Kusiri Limited | Homepage | PwC comments on Women on Boards Davies Review »

  • Contact us
  • +44 (0) 20 7213 1768

Specific and out of hours contacts