April 8, 2016 / 10:41 PM / 3 years ago

Vertellus Specialties skips debt interest payment -sources

April 8 (Reuters) - Vertellus Specialties Inc, a U.S. manufacturer of agricultural chemicals such as pyridine, is in talks to cut a deal with its lenders after missing a debt interest payment, according to people familiar with the matter.

Weak agricultural markets, combined with overcapacity and increased competition from China, have hit the chemical company, owned by buyout firm Wind Point Partners. Moody’s Investors Service Inc said the company, which has about $555 million in debt, will need assistance meeting the requirements of some of that debt as sales and profits plummet in some key divisions.

Vertellus hopes to clinch a forbearance agreement with lenders as early as next week, the people said this week. The company is working with investment bank Jefferies LLC on debt restructuring options, the people added.

Vertellus has also been exploring the sale of its specialty materials and sodium borohydride units to pay down debt, the people said. The sodium borohydride unit could fetch as much as $200 million, according to one of the people.

The sources asked not to be identified because the deliberations are confidential. Requests for comment to Wind Point and Vertellus were not immediately returned. Jefferies declined to comment.

Indianapolis, Indiana-based Vertellus has manufacturing plants across the United States, Asia and Europe. It reported revenue of $596 million in 2015, Moody’s said.

Vertellus’ term loan and revolving credit facility do not mature until 2019, according to Thomson Reuters data.

Moody’s said that without help from Wind Point, the company will not be able to meet covenants in the term loan this year. (Reporting by Jessica DiNapoli and Mike Stone in New York; Editing by David Gregorio)

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