Rigolleau to take out syndicated loan
July 1, 2020 |
Argentine glass manufacturer approves borrowing $15.3 mln even as economy tanks
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Argentine glass container manufacturer Rigolleau said its board of directors has approved taking out a syndicated loan for ARS1.08 billion ($15.3 million), even as a tanking economy during a coronavirus-induced lockdown hits output.
The company said it is negotiating the asset-based loan with BBVA and added that Banco Galicia, ICBC and HSBC could also form part of the syndicate, according to a securities filing.
BBVA is organizing the loan, which will pay a to-be-determined rate of interest, the company said. The loan will be for at least 3.5 years with a nine-month grace period on the principal at the start, it added.
The 138-year old company, which makes bottles for beer, perfume and wine as well as glass products for the home, said it will use the loan to refinance debt and add to working capital. The loan will be secured by a property in Berazategui, Buenos Aires, where it is based on the outskirts of the federal capital. Tanoira Cassagne Abogados is Rigolleau's legal adviser on the deal.
The proposed loan comes even as manufacturers on the whole suffer declines in output and demand during a lockdown of the economy. The federal government ordered the 45 million population to stay at home from March 20, and while the restrictions on movement have been loosened, the quarantine has been extended to a latest proposed end date of July 17. The restrictions have been tightened in Greater Buenos Aires, home to 14.8 million people, or a third of the country, and other major cities as the virus spreads faster than had been expected.
The result is that the economy sank 26.4% year-on-year in April, according to data released on Monday by Indec, the state statistics agency. The manufacturing industry saw output plunge 34.4% and commerce tank by 27% in April compared with the year-earlier level, a sign of the impact of the lockdown on Rigolleau's finances.