“The economic effect for the shareholders of Nyrstar NV of the restructuring transaction would be a very substantial dilution,” the world’s second-largest zinc producer said in a note on the Euronext exchange this morning.
Negotiations with stakeholders over a combined €850 million ($961.4 million) of debt repayments due this September and in 2024 are “constructive” and have led to the deferral of €31.6 million in interest coupons due today, Nyrstar said.
The announcement is the first public acknowledgement from the company that equity holders, foremost being trader Trafigura
, will be affected by the restructuring, with shares in the company falling to one-month lows this morning.
The company’s share price recently stood at €0.37 per share, down by 12% from an opening price of €0.42 per share on Friday.
All stakeholders need to come to an agreement before April for auditors to sign a going concern statement on Nyrstar's 2018 results, according to Belgian law.
Any disruption to zinc and lead producing assets would likely have a significant effect on concentrate treatment charges (TCs), metal premiums and outright prices, market sources told Fastmarkets.
"If Nyrstar closes for even a few days, spot [zinc] TCs are going to hit $400 [per tonne]," a trader source said.
Fastmarkets’ monthly assessment of spot zinc TCs, cif Asia Pacific
, stood at $210-250 per tonne at the end of February, though terms have risen since then.