Nynas AB, a Swedish manufacturer of specialty naphthenic base oils and bitumen products, said its application to extend the company’s reorganisation for another three months, until September 15, 2020, has been approved by Södertörn’s District Court.
Extensive work has been carried out throughout the reorganisation, which has resulted in decisive progress in the last month, Nynas said in a statement.
“The conditions for a long-term sustainable reorganisation of Nynas operations are good. Both Nynas and the administrators now believe that it is possible to complete the reorganisation in the coming three-month period,” the company said.
On May 12, the U.S. Treasury Department’s Office of Foreign Asset Control (OFAC) announced that Nynas is no longer blocked pursuant to the Venezuela Sanctions Regulations. As a result of a corporate restructuring of the ownership of Nynas AB, sanctions were lifted, and U.S. persons and companies no longer require an authorization from OFAC to engage in transactions or activities with Nynas.
The removal of the U.S. sanctions is a key element for a successful completion of the reorganisation. Following this announcement, Nynas has been able to contract deliveries of crude oil and to continue discussions on both short- and long-term financing under more favourable terms.
Conversion of shareholder debt
At the end of March, Nynas received an equity contribution from its shareholders in the amount of approximately EUR119 million (USD134 million). This was made in the form of a shareholder contribution by converting a subordinated shareholder loan from June 2018.
Deferred payment of the main debt
Recently Nynas, the banking consortium and the main crude oil supplier agreed to extend the due date for their claims against Nynas in such a way that payment deferral was granted for 12 months with June 30, 2021 as the new termination date. The agreement highlights Nynas’ and the main creditors’ joint efforts to enable a successful reorganisation.
The objective is to ensure that the reorganisation can be completed through the contribution of new capital, including a concurrent negotiated settlement with the banking consortium and the main oil supplier, whereby Nynas’ other creditors should not be affected beyond the delay that the reorganisation already has caused.