France grants loan to Eramet's SLN nickel unit to avert collapse (updated)
13/02/2023 19:01
(Adds details)
PARIS, Feb 13 (Reuters) - The French government has
agreed to grant a 40 million euro ($42.9 million) loan to SLN,
the New Caledonian nickel producer controlled by mining group
Eramet ERMT.PA facing financial collapse, the economy ministry
said on Monday.
The nickel producer
warned in November
of a "cash crisis" after drawing on the last tranche of 63
billion Pacific Francs ($567.57 million) in loans provided by
Eramet and the French state in 2016 under a previous rescue
package.
SLN has for years tried to improve profitability hit by
social unrest and energy supply issues in the French Pacific
territory. Eramet's hopes of boosting SLN's performance through
increased
exports of nickel ore
were dashed last year by weather disruption to output and a
surge in energy costs.
The government's decision to provide a new loan came
after an emergency cost savings plan launched by SLN failed to
resolve its cash crisis, the economy ministry said.
As part of the short-term aid, Eramet would expand an
existing overdraft facility with its subsidiary, the ministry
said.
Eramet declined to comment further.
SLN's minority shareholders, the STCPI vehicle
representing New Caledonia's provinces, and Nippon Steel
5401.T refused to offer fresh financial support for SLN, the
ministry added.
In return for its aid, the French government will
consider creating loan guarantees against SLN's assets, and has
ordered an audit of New Caledonia's nickel industry to explore
restructuring options, the ministry said.
SLN is one of three nickel producers in New Caledonia,
alongside Prony Resources and KNS, the latter part-owned by
international commodities group Glencore GLEN.L .
($1 = 0.9332 euros)
($1 = 111.0000 Pacific francs)
(Reporting by Gus Trompiz; Editing by Jan Harvey and David
Gregorio)
((gus.trompiz@thomsonreuters.com; +33 1 49 49 52 18; Reuters
Messaging: gus.trompiz.thomsonreuters.com@reuters.net))