Stemcor Holdings Ltd., the steel trader that defaulted on an $850 million loan last year, won permission from a London judge to restructure its debt.
Judge Colin Birss approved the plan over an objection from one creditor at a hearing today in London. A majority of the company’s lenders voted to support the “scheme of arrangement” processes, which include the company replacing existing credit facilities and borrowing an additional $1.15 billion trade finance and borrowing base facility.
Stemcor is reorganizing its debt after reporting a loss in 2012 amid lower demand for steel. The company, owned by the Oppenheimer family including U.K. politician Margaret Hodge, replaced chairman Ralph Oppenheimer with restructuring specialist John Soden and sought to raise funds by selling assets in India.
Lender support for the deal “puts Stemcor back on a solid and stable path for future growth,” Chief Executive Officer Julian Verden said in an e-mailed statement. “Our core business will now consist of a much leaner combination of trading, distribution and stockholding.”
Stemcor plans to use cash and proceeds from disposals, including its operations in India, to pay down its debt, the company told the court last month. JSW Steel Ltd. and Essel Mining & Industries Ltd. have offered about $800 million for Indian assets owned by Stemcor, people familiar with the matter said this month.
The case is in the matter of Stemcor (S.E.A) PTE Ltd and Stemcor Trade Finance Ltd High Court of Justice, Chancery Division.