Peruvian zinc miner Volcan Cia Minera, which was recently acquired by Argentine group Integra Capital, plans to push ahead with the sale of its non-core assets in an effort to refinance a pile of debt due in the next few years.
Volcan CEO Luis Fernando Herrera stated that the company, in which Glencore Plc (OTC:GLNCY) sold its majority stake last month, is seeking to sell its real estate near the new Peruvian port of Chancay on the Pacific coast, as well as its holding in a cement manufacturer in Chile. Two hydropower units have already been sold for about $78 million.
Herrera said last week in an interview that Volcan anticipates raising more than $200 million between the Chilean asset and the project near Chancay. A developer could find great value in the port lands for logistics and commercial ventures, but he clarified that Volcan isn’t that developer.
“We need to strengthen the capital structure of the firm since there are a lot of maturities coming due in the next three years that require immediate attention,” Herrera said. “We’re negotiating with our group of syndicate banks and bondholders which is advancing well. We hope to provide updates soon to the market. We’re very optimistic.”
Investors have applauded the transactions, citing rising confidence that Volcan will be able to satisfy its looming debt deadlines. Lucror Analytics now recommends that clients acquire Volcan bonds maturing in 2026.
“We believe that the bonds will recover further after the planned debt payments in June and August are made,” Lucror credit analyst Josseline Jenssen wrote in a note Monday. She expects the refinancing process to take place “soon without imposing losses on creditors.”
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