(AOF) – Eramet announces the launch of a cash repurchase offer relating to its entire bond issue issued on November 21, 2019, in the amount of 300 million euros, the nominal amount of which currently in circulation is of 293,600,000 euros, maturing in May 2025, and admitted to trading on the regulated Euronext market in Paris.
Eramet also announces its intention to proceed, subject to market conditions, with a new bond issue linked to sustainable development (sustainability-linked bonds) denominated in euros concurrently with the buyback offer.
The latter is carried out according to the terms and subject to the conditions described in the Tender Offer Memorandum dated May 21, 2024. This offer is notably conditional on the success (at the sole and complete discretion of the company) of the completion of the new issue bond.
The new bond issue should be admitted to listing on the regulated Euronext market in Paris. The net proceeds from the new bond issue would be used to help finance the company’s general needs, including the repurchase of existing bonds tendered to the repurchase offer.
A priority allocation mechanism for the securities of the new bond issue could be applied at the sole and absolute discretion of the company in favor of eligible holders of existing bonds participating in the repurchase offer and wishing to subscribe to the new bond issue.
The objective of this buyback offer and the proposed new bond issue is, in particular, to proactively manage the company’s debt profile and extend its average maturity.
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Learn more about Eramet
Key points
– Producer, created in 1880, of ores and alloy metals, world leader in manganese ore and ferronickel, 4th in zircon and titanium materials;
– Turnover of €5.4 billion, refocused on mining and metals – manganese for 59% of sales, nickel for 33%, mineral sands for 9%, lithium being under development;
– Sales made in Asia for 50% (including 20% in China), in Europe for 28% (including 6% for France), in South America for 12% and in North America for 6%;
– Business model based on the valorization of metals and minerals essential to economic development (manganese, nickel, mineral sands) and the energy transition (lithium, nickel/cobalt salts, battery recycling);
– Capital jointly controlled at 64.21% by the French State, including STCPI (4%, Société Territoriale Calédonienne de Participation Industrielle, owned by the New Caledonian provinces), Cristel Bories being CEO of the board of 18 directors;
– Cleaned up balance sheet with debt leverage of 0.7 at the end of June 2023 and equity ratio of 33%.
Challenges
– Refocused strategy after the disposals of Auber & Duval and Eurasteel:
– grow in attractive businesses – manganese ores and mineralized sands,
– expand the portfolio in metals for energy transformation – nickel and cobalt salts and recycling of lithium ion batteries;
– Innovation strategy supported by the IDEAS center in Trappes and financed at 1% of revenues:
– deployed internally via the Data Factory: management by mining 4.0 business units using data, additive production, robotization, IoT, artificial intelligence, etc.
– based on open innovation: challenges for young doctors, start-up competitions, university and scientific partnerships;
– Environmental strategy to contribute to carbon neutrality in 2050:
– 40% reduction in CO2 emissions in 2035, particularly in the decarbonization of metallurgical production and the rehabilitation of mining sites (residue management),
– circular economy and protection of water resources and air quality,
– increase to 40% in 2030, compared to 2019, of loans linked to sustainable development;
– World-class resource portfolio: manganese (Moanda in Gabon), nickel and nickel-cobalt (New Caledonia and Weda Bay in Indonesia), mineral sands (Senegal), lithium (Argentina and France) and battery recycling (France) .
Challenges
– Sensitivity to geopolitical risks in New Caledonia, Gabon and Senegal;
– Success of the cost reduction and production optimization plan in the face of a degraded market – fall in the selling prices of manganese and nickel, inflation in the price of inputs and logistical disruptions;
– Project progress:
– energy transition: pilot plant in France for battery recycling and, for 2024, launch of lithium production in Argentina and finalization of the study on nickel and cobalt at Sonic Bay,
– expansion of the portfolio: exploration of lithium brines in Chile and, in Indonesia, of nickel limonites.
Learn more about the Commodities/Metals sector
The multiple challenges of environmental criticality
It first refers to the supply and availability of different metals in the subsoil. The other determining element is demand. According to the International Energy Agency, lithium consumption will increase more than 40-fold by 2040. Copper is also the perfect example of this criticality. According to S&P Global, copper consumption will double by 2035, from 25 million tonnes per year to 50 million tonnes. However, investments in new mines are penalized by falling prices and rising financing and production costs. Shortages are therefore to be feared in ten or fifteen years. Finally, the mining industry will face growing opposition from populations because of its impacts (particularly in terms of waste and water pollution).