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Ferroglobe, creditors hire advisors as debt restructuring speeds up: sources

LONDON (Reuters) - Ferroglobe, the largest western producer of silicon metal, and its creditors have hired finacial advisers to speed up a restructuring of the company’s $451 million of debt, two sources familiar with the situation said.

Ferroglobe GSM.O, 53% owned by Spanish billionaire and former finance minister Juan Miguel Villar Mir, is under pressure as the COVID-19 pandemic exacerbates a slowdown in demand from the automotive industry, the main consumer of silicon metal, in Europe and the United States.

The company has hired investment bank Houlihan Lokey and its creditors - a mixture of funds and banks - are working with U.S. investment bank Moelis as negotiations to restructure the company’s debt gather pace, the sources said.

Houlihan Lokey and Moelis declined to comment.

Ferroglobe said it is exploring some combination of a potential new financing and/or refinancing of existing debt, without giving further details.

Its debt amounted to $451 million in notes and credit facilities, with $350 million maturing in March 2022.

Grupo Villar Mir (GVM), the private holding of the octogenarian industrialist, had reportedly been in talks with distressed debt investors including Atitlan Venture Capital and Apollo Asset Management to sell part or all its stake in Ferroglobe, but the virus outbreak put a break on the discussions.

The advisory mandates may mean that talks have restarted between the holding company and investment funds, which could buy the debt and swap it for equity, one of the sources said.

GVM did not immediately respond to a request for comment.

Ferroglobe’s market capitalisation has fallen sharply to just $111 million, compared to more than $2 billion on its public market debut in 2015.

Silicon metal is typically added to aluminium alloys to strenghten them and make them lighter. It is also used in solar cells and computer chips.

Reporting by Clara Denina; additional reporting by Isla Binnie and Clara-Laeila Laudette in Madrid and Abhinav Ramnaryan in London; editing by Kirsten Donovan

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