By Jesús Aguado and Chiara Elisei
MADRID/LONDON (Reuters) – Shareholders and creditors of Spain’s largest private industrial group, Celsa, have clashed over the company’s valuation as part of a longstanding debt-restructuring dispute, legal representatives for the two camps said on Tuesday.
The valuation of Celsa is key to the dispute as a low valuation could render equity worthless.
Celsa’s restructuring plan is the first big test of Spain’s new insolvency law which allows debtors to make use of pre-insolvency mechanisms early and benefit from court protection.
If the plan goes through, it may pave the way for other troubled firms to use the new process, helping cut bankruptcy rates that spiked after the pandemic.
Celsa’s creditors, including SVP, Attestor, Anchorage, GoldenTree and Deutsche Bank, and the Rubiralta family owners have been unable to agree on how to restructure around 3 billion euros ($3.30 billion) of debt, Celsa shareholders’ lawyer from Cortes Abogados, Jaime Cano, said in a court hearing in Barcelona.
He blamed the creditors for the standstill.
“They were not and are not interested in an agreement that would put an end to the situation, they need to keep the debt in default so they can use non-payment as a justification for insolvency,” Cano said.
Celsa’s creditors have proposed cutting the debt by around 1.29 billion euros and taking control of the firm.
Rodrigo Lopez Gonzalez, lawyer from Gomez-Acebo & Pombo representing creditors, said that there was no alternative to the restructuring proposed by creditors.
While Celsa shareholders are open to creditors taking some of Celsa’s equity, as long as the family owners retain control, the make-up of that split remains a stumbling block.
A final ruling is not expected until early September, Judge Alvaro Lobato said on Tuesday.
At the core of the dispute is the valuation of Celsa.
Shareholders advised by investment firm Lazard and AZ Capital put the value at 5.8-6.7 billion euros, while court-appointed consultancy firm Lexaudit put it at 2.4-2.8 billion euros, meaning the equity could be worth zero.
The valuation gap is the result of a different methodology used by Lazard and AZ Capital, which takes into account Celsa’s 2021 and 2022 results and an eight-year business plan, Celsa shareholders’ lawyer Cano said.
A separate valuation from consultant BDO of around 4.2 billion euros would also be above the firm’s debt, he added.
Creditors’ lawyer Lopez Gonzalez said that Celsa’s valuations were “unrealistic and unacceptable. The appearance of a viable alternative for the Celsa group is in reality pure fiction, a chimera that does not exist.”
The 2020 COVID crisis affected Celsa’s business due to lock-downs and difficulty obtaining raw materials, leading to a loss of 364 million euros. In 2022, the firm reported an EBITDA of 867 million euros. ($1 = 0.9087 euros)
(Reporting by Jesús Aguado and Chiara Elisei; Editing by Conor Humphries)
