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(Bloomberg) — Opportunistic credit firm Strategic Value Partners is proposing a deal to fix OQ Chemicals GmbH’s balance sheet that would see it take control of the company, according to people with knowledge of the matter.
The deal would see fresh funds injected into the business and allow the company to address its nearly $1 billion worth of term loans that come due in October, said some of the people, who requested anonymity to discuss private information. SVP has been scooping up the company’s loans on the secondary market and is now one of its largest lenders, they said.
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The developments come after a group of creditors rejected a takeover offer from private equity firm Advent International, which had signed an exclusivity agreement with OQ Chemicals, some of the people said, asking not to be identified. The term loan group, which does not include SVP, rejected different iterations of that deal because it offered a recovery that they considered too low, the people said.
OQ Chemicals has been in a tough spot since its owner, Oman’s state energy company, ruled out providing new money for the business, throwing plans to refinance its upcoming debt into disarray. The Germany-based company has outstanding term loans of €475 million ($516 million) and $435 million.
Negotiations are still ongoing and a range of options are being considered with no outcome certain yet, some of the people said. Representatives for Advent, OQ Chemicals and SVP declined to comment. A spokesperson for Omani owners SAOC didn’t immediately respond to a request for comment.
Other Options
The group of term loan holders are also considering a lender-led solution, including SVP, if the company and its owner reject SVP’s proposal, some of the people said.
Advent had offered to inject as much as $250 million worth of equity in exchange for a majority stake, Bloomberg previously reported. OQ Chemicals, formerly known as Oxea, was owned by Advent until 2013.
—With assistance from Anthony Di Paola.
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