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Blackstone & Apollo Buy Portland’s Debt & Put Pressure on FCC

4/09/2014 – El Confidencial

While giving the finishing touch to the stand by of her €1 billion personal debt, Esther Koplowitz has to face another challenge. GSO (vulture fund of Blackstone) and Apollo have acquired a half of the debt of Portland Valderribas, cement manufacturer belonging to the busineswoman‘s FCC (77.9% stake) which is also in default until September 30th.

The two opportunistic funds have taken advantage of a decision taken by the lenders of Portland and bought €500 million in loans. GSO and Apollo strive at becoming the new main creditors of FCC‘s cement producer whose managers will now have to negotiate with the distress funds to prolong a global redemption of €1.277 million.

BBVA agreed to wait more for the payment on condition that FCC would maintain relatively positive results. The company failed to do so. 75% of Portland‘s debt obtained a permission to be paid-off by the end of September. However, on the return from holidays, Mrs Koplowitz found out that now she has to negotiate with two vulture funds.

Surprisingly, Blackstone had already been one of the lenders of Portland before the purchase. In 2012, the fund agreed to finance Giant, U.S. arm of the cement manufacturer, with €350 million in high risk bonds at a 10% interest rate.

As a consequence, the future of Portland rested in hands of Blackstone and that outraged FCC. Its directors believed that by the time the final solution for the parent company and the family debt is found, a way to solve the problem with Portland will come up. The firm‘s working capital is drowning in the red (a €817 million debt) in spite of fierce cuts in the number of manufactures and employees.

 

Original article: El Confidencial (by Agustín Marco)

Tanslation: AURA REE