La Seda de Barcelona hopes to halt insolvency with debt deal

MOSCOW (MRC) -- Spanish plastics bottle maker La Seda de Barcelona will ask shareholders to approve its debt refinancing plan and allow it to withdraw from insolvency proceedings on Wednesday, a person close to the company with knowledge of the plan told Reuters.

La Seda said in a stock market notice on Tuesday that it had reached a preliminary deal to refinance 75% of its syndicated debt with creditors, after saying last week it would file for insolvency.

The company should now be able to restructure EUR235 million (USD307 million) of syndicated debt following the agreement, with over half its creditors signing up to refinance 75.4% of the debt.

"That means all the legally required thresholds to implement the company's syndicated debt refinancing proposal have been reached," La Seda de Barcelona said in a statement.

"If the process to withdraw from insolvency proceedings is approved tomorrow, (biggest creditor) Anchorage's plan to convert the debt into capital will go ahead, but that has to be decided at tomorrow's meeting," the person said.

The Catalonia-based company, which makes bottles in Europe, Turkey and North Africa, has been in talks with creditors since last September after high material costs and excess supply of the PET plastic containers it makes put pressure on the business.

As MRC wrote before, Invista Performance Technologies has acquired from La Seda de Barcelona SA intellectual property relating to its leading purified terephthalic acid (PTA), polyethylene terephthalate (PET) and related process technologies, including the full rights to exclusively license the technologies in the region comprising Europe, the Middle East and Africa.

The firm, whose biggest creditor is U.S. hedge fund Anchorage, said last week it would start insolvency proceedings after failing to get the 75 percent of creditors it needed on board with its refinancing plan.

La Seda had 600 million euros of debt at the end of 2012, according to company filings, and has EUR462 million in syndicated loans from banks, according to Reuters loan market news and analysis service RLPC.

A source close to the talks had said last week that EUR235 million of that syndicated debt needed to be restructured.

MRC

MOSCOW (MRC) -- Russia's production of polypropylene (PP) in May exceeded 69,000 tonnes, up 6% from April. The main increase in the production was provided by Polyom, Omsk, according to MRC ScanPlast.

Russia's PP production in May grew by 6% compared to the April index, despite reduced capacity utilisation of some plants and a scheduled maintenance works at Ufaorgsintez.

The capacity utilization of the new site Polyom, Omsk (Titan Group) offset the decline in production of other plants. Only two Russian producers - Stavrolen and Polyom could increase their capacity utilisation in May.

Stavrolen increased its capacity utilisation in May by 14% compared to April. The plant's production of PP in May totalled about 11,400 tonnes.

Polyom actually doubled its capacity utilisation, the total production of PP in May exceeded 11,000 tonnes, from 5,200 tonnes in April.

In general, the total production of PP in Russia in Jan-May 2013 made 328,700 tonnes, up 25% compared with the same period a year ago.
Such a serious increase in production in the current year was provided by the launch of Polyom, Omsk (180,000 tonnes/year) and a stable PP production by Stavrolen, which resumed its work in March after the accident at ethylene production.


MRC

MOSCOW (MRC) - Russia's production of caustic soda in January-May 2013 fell by 1.2% compared to the same period in the previous year and totalled 448,700 tonnes, according to MRC Monthly Report.

The share of Kaustik (Volgograd) accounted for 20% of Russia's total production of caustic soda over the five months of the year.

The share of SayanskKhimPlast made 18% from all the volume of caustic soda produced in Russia over this period.

Kaustik (Sterlitamak) produced 17% of the total production of the material in the country.

Russia's production of caustic soda in May made about 87,000 tonnes, up 2% from April.

Sibur-Neftehim in May did not produce caustic soda. The company's facilities have been staying idle for the second consecutive month.
MRC

MOSCOW (MRC) - The Ukrainian government is to raise import duty on unmixed polyvinyl chloride (PVC) in autumn 2013. The chances of adoption of this law are large enough, according to MRC analysts.

The bill regarding the raise of the import duty on unmixed polyvinyl chloride (PVC) has been agreed in all the committees of Ukrainian parliament by the beginning of June.

Ukrainian parliament has gone on vacation till September and the bill will not be accepted before the autumn.

The bill assumes increasing import duty on unmixed PVC from current 0% to 6.5% (which corresponds WTO regulations), besides there will be introduced an additional anti-dumping duty on US PVC.

The increase of PVC import duty was one of the commitments of Ukrainian government undertaken in April to resume the production of Karpatneftehim, the only Ukranian producer of PVC. The government signed a memorandum about this with the Russian company Lukoil, the owner of Karpatneftehim.

The memorandum has a number of conditions for the resumption of Karpatneftehim's production, including the increase of import duty.
MRC

MOSCOW (MRC) -- The converters of polyethylene terephthalate (PET) in the CIS countries expect a further decline in export prices of Chinese bottle grade granulate in July, according to ICIS-MRC Price Report.

Last week converters of bottle grade PET in the CIS countries reported a decrease in the purchasing prices by USD15-20/tonne.

PET prices in Asia were cut on the back of a sluggish buying activity, as well as falling prices of paraxylene. PET prices in the Ukrainian port were at USD1,410-1,445/tonne CIF Odessa, excluding VAT.

Import prices of Chinese bottled grade PET for the Russian market ranged USD1,391-1,416 per tonne CFR East, excluding VAT.

Some converters stopped buying and are waiting for future price development on the back of uncertain price trends.

Major market players expect that in July the export prices of Chinese bottle PET granulate can fall to USD1,300-1,320/tonne FOB China. Some market sources are more pessimistic in their outlook and expect PET prices in late July to be cut significantly below USD1,300/tonne FOB China.

Export prices of Chinese PET for CIS customers last week were voiced at USD1,360-1,390/tonne FOB China.

One of the largest PET converters in Ukraine said that he had received an offer from the producer at USD1,350/tonne FOB China.

MRC