FRANKFURT, March 31 (Reuters) - Loss-making German metals recycling group Scholz AG has attracted three bids as it seeks a buyer to inject fresh equity to put the company’s finances back on a solid footing, three sources familiar with the transaction said.
Scholz, burdened by 1.1 billion euros ($1.5 billion) of debt at the end of 2013, has been hit by weak metal and scrap markets and launched a restructuring to rein in its aggressive past expansion, selling smaller non-core operations and shutting some sites.
Japan’s Toyota Tsusho, an un-named Chinese company and buyout group KKR handed in bids before Friday’s deadline in an auction organised by Rothschild, two of the sources said.
“There is going to be an equity value,” one of the sources said, implying that Scholz’s creditors will not face any haircuts on their loans.
Scholz, Toyota Tsusho, KKR and Rothschild declined to comment.
A separate sales process for Scholz’s aluminium and engineering steel businesses is also under way as the group seeks to reduce its debt to 700 million euros, the sources said.
Most of the debt is in bank loans, some of which have been bought up by funds such as Davidson Kempner, SVP and TPG.
Scholz booked a post-tax loss of 314 million euros in 2013, hit by charges relating to the restructuring. Earnings before interest, tax, depreciation and amortisation shrank by 31 to 125 million euros. ($1 = 0.7271 Euros) (Reporting by Arno Schuetze; Additional reporting by Nathan Layne; Editing by David Goodman)