Total transaction value of €170 million

[Ferro-Alloys.com]LONDON, Sept. 03, 2019 (GLOBE NEWSWIRE) -- Ferroglobe PLC (NASDAQ: GSM) (“Ferroglobe” or the “Company”), announced today that it successfully completed and closed the previously-announced sale of its 100% interest in subsidiary FerroAtlántica, S.A.U. (“FerroAtlántica”) to investment vehicles affiliated with TPG Sixth Street Partners on August 30, 2019.  The FerroAtlántica assets transferred in this transaction include ten hydroelectric power plants with a combined generating capacity of approximately 167 MW, and the Cee-Dumbría ferroalloys factory, all located in the province of A Coruña (Spain). Simultaneously, the Company signed a long-term tolling agreement with FerroAtlántica under which it is the exclusive off-taker of Cee-Dumbría factory’s finished goods. In return for this exclusivity, Ferroglobe commits to supplying FerroAtlántica with key raw materials over the long term.

The transaction, valued at €170 million, provides gross proceeds of €156.4 million to the Company, after agreed adjustments (cash flow from the operations in 2019, working capital and net debt).  The proceeds will be used to repay €57 million of existing indebtedness at FerroAtlántica and related transaction fees, with the remaining €100 million ($110 million) to be held in cash and used for general corporate purposes.   

Following this transaction, the Company’s pro forma cash on hand at June 30, 2019 is $298 million and net debt is $308 million.

Javier López Madrid, the Executive Chairman of Ferroglobe commented, “The divestiture of FerroAtlántica marks a significant accomplishment and the expeditious delivery of a very complex transaction.  With a valuation multiple of approximately 13 times based on cycle average EBITDA, the transaction is value enhancing for Ferroglobe, and represents an important milestone in the Company’s efforts to strengthen its balance sheet, particularly as we work to complete the refinancing of our revolving credit facility. Following the sale our net debt and liquidity are at levels which better position the Company to navigate the cyclical downturn and set the foundation for a profitable and financially healthier recovery.”

• [Editor:tianyawei]