Unigel Files for Extrajudicial Reorganization with Creditor Support

SÃO PAULO, Feb. 21, 2024 /PRNewswire/ -- Unigel Participações S.A ("Unigel") hereby informs the market in general that, today, it and certain of its subsidiaries (such subsidiaries, together with Unigel, the "Company Parties"), together with certain holders of Unigel's unsecured senior notes due 2026 issued by Unigel Luxembourg S.A. ("UnigelLuxembourg") (the "Original Signatory Creditors"), have jointly filed two consensual extrajudicial reorganization (recuperação extrajudicial) plans with the 2^nd. Bankruptcy State Court for the São Paulo District of the State of São Paulo (the "EJCourt"), one proposed by Unigel (such plan the "HoldCo EJ Plan") and one proposed by (i) Unigel Luxembourg; (ii) Proquigel Química S.A.; (iii) Companhia Brasileira de Estireno and (iv) Plastiglas de Mexico S.A. de C.V. (such plan the "OpCo EJ Plan", and together with HoldCo EJ Plan, the "EJ Plans"). The EJ Plans currently contemplate that only certain financial creditors designated thereto will have their claims against the Company Parties restructured under the EJ Plans.

Concurrent with the filing of the EJ Plans, and as required by Brazilian law, the Original Signatory Creditors, holders of more than one-third (1/3) of the claims against each of the Company Parties to  be restructured by the EJ Plans signed jointly the filings to evidence their support. The Company Parties and the Original Signatory Creditors will have ninety (90) days to demonstrate the approval of the EJ Plans by a majority of the claims held against each of the Company Parties to be restructured under the EJ Plans, as required under Brazilian Bankruptcy Law. The EJ Plans will then be considered by the EJ Court without a general meeting of creditors and, after confirmed, will require recognition by the United States Bankruptcy Court for the Southern District of New York.

Under the terms of the EJ Plans, approximately R$3.9 billion in existing claims against the Company Parties (which represents the approximate amount of the claims against the Company Parties to be restructured under the EJ Plans) will be restructured into (i) newly issued debt instruments (the "New Notes") and (ii) newly issued convertible participating titles (the "Participating Titles", and both securities together the "Reinstated Securities") and delivered to the financial creditors affected by the EJ Plans in exchange for cancellation of their existing claims.  The final amounts of Reinstated Securities issued under each EJ Plan will depend on the participation of the impaired creditors in the New Money Notes (as defined below) (in accordance with the terms of the EJ Plans).

The EJ Plans further provide that that  Company Parties will issue at least US$100 million in new money notes due December 2027  (the "New Money Notes"). Pursuant to the terms of the EJ Plans, holders of the claims to be restructured under the EJ Plans will be entitled to participate in the issuance of New Money Notes and creditors effectively participating in the New Money Notes will receive in aggregate an equity interest in Unigel of 50%.

This consensual solution is a result of intense negotiations carried-out in the past months and reinforces both Unigel's and the Original Signatory Creditors' commitment to improving Unigel's capital structure, enhancing its liquidity and deleveraging the Company Parties, for the benefit of all stakeholders.

In connection with the negotiation of the EJ Plans, the Company Parties agreed to disclose publicly material non-public information concerning the Company Parties that has been provided to the Original Signatory Creditors. In satisfaction of such disclosure obligations, the EJ Plans (and associated commercial term sheets) and such additional information are publicly available on Unigel's website at https://ri.unigel.com.br/en/restructuring-plan/.

The consummation of the EJ Plans is subject to the satisfaction of the closing conditions therein and, among other things, the entry into of final documentation, the adhesion of the majority of the impaired credits affected by the EJ Plans and  confirmation of the EJ Plans by the EJ Court pursuant to a final order.

DISCLAIMER

FORWARD LOOKING STATEMENTS: Certain information contained in this press release may contain forward looking statements within the meaning of applicable securities laws. The use of any of the words "continue", "plan", "propose", "would", "will", "believe", "expect", "position", "anticipate", "improve", "enhance" and similar expressions are intended to identify forward-looking statements. More particularly and without limitation, this document may contain forward-looking statements concerning: key terms of the restructuring; the expected process and timing for implementing the restructuring; the deadlines for submitting proxies and voting instructions; the scheduling of the creditors' meeting; the relief to be sought in by Unigel in the proceedings in respect of the EJ Plans; the completion of the restructuring, including with respect to obtaining any necessary approvals and satisfying any conditions and the expected timing thereof; the public posting of materials and information related to the restructuring; and the effect of the restructuring.

Forward-looking statements necessarily involve risks, including, without limitation, risks associated with the ability of Unigel to implement the restructuring on the terms described in this press release, the ability of Unigel to receive all necessary court, third party and stakeholder approvals in order to complete the transaction; the ability of Unigel to operate in the ordinary course during the proceedings, including with respect to satisfying obligations to service providers, suppliers, contractors and employees; the ability of Unigel to continue as a going concern; the ability of Unigel to continue to realize its assets and discharge its liabilities and commitments; Unigel's future liquidity position and access to capital to fund ongoing operations and obligations (including debt obligations); and the ability of Unigel to stabilize its business and financial condition.

Although Unigel bases its forward-looking statements on assumptions believed to be reasonable when made, they are not guarantees of future performance and actual results of operations, financial condition and liquidity, and developments in the industry in which Unigel operates, may differ materially from any such information and statements in this news release. Other unknown or unpredictable factors also could harm Unigel's future results. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this news release are made only as at the date hereof. Unigel does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by law.

THIS RELEASE DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES IN THE UNITED STATES AND IT DOES NOT CONSTITUTE AN OFFER, SOLICITATION OR SALE IN ANY STATE OR JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL. SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES UNLESS THEY ARE REGISTERED OR EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT").

THE EJ PLANS AND THEIR ATTACHMENTS ARE NOT AN OFFER OR ACCEPTANCE WITH RESPECT TO ANY SECURITIES OR A SOLICITATION TO PURCHASE ANY SECURITIES OR AN ACCEPTANCE OF THE EJ PLANS PROPOSED IN CONNECTION WITH ANY INSOLVENCY PROCEEDING AND ANY SUCH OFFER OR SOLICITATION WILL COMPLY WITH ALL APPLICABLE SECURITIES LAWS AND ANY OTHER APPLICABLE LAW.

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SOURCE Unigel