By Adria Calatayud
Solvay, the Belgian chemicals company, has announced its plans to redeem bonds worth €600 million ($647.7 million) that are due in 2029. In addition, the company has decided not to seek consent from the holders of these bonds ahead of its planned split into two companies.
Recently, Solvay discovered a trade between third parties involving its 2029 bonds and is currently conducting an internal investigation into the matter. As a part of its split, Solvay had initiated a process to transfer outstanding debts to a new company called Syensqo, which is expected to be completed by the end of this year. However, due to concerns regarding the validity of certain votes cast in favor of the consent solicitation, Solvay has canceled the scheduled meeting for bondholders.
While the votes in question represent less than 3% of the total nominal amount, Solvay cannot confirm whether the required 75% majority for the 2029 bonds has been reached. As a result, the company intends to redeem these bonds using funds from its bank facilities, incurring an additional annual cost of €20 million. Consequently, Solvay has terminated the consent solicitation for the 2029 bonds.
On the other hand, the consent solicitation for Solvay’s bonds due in 2025 and 2027 is expected to be successful. Meetings for the holders of these bonds will proceed as planned on Tuesday.
Solvay’s decision to transfer outstanding debt securities to Syensqo is based on the latter’s higher credit rating when compared to the other entity resulting from the company’s separation.
