PARIS (Reuters) – Eramet said on Monday it had reached an agreement with the French government to remove several hundred million euros of debt from its balance sheet linked to its loss-making nickel subsidiary SLN in New Caledonia.
The existing loans of 320 million euros granted by the State to SLN and the intra-group debt of 325 million euros will be converted into a “quasi-equity” instrument, the group said.
The conversion of the intra-group part of the debt has no impact on the group’s consolidated accounts, Eramet added.
In an email sent to Reuters, the Ministry of Economy and Finance confirmed this accounting operation, specifying that it would allow “to strengthen Eramet’s balance sheet” without new financing from the French state.
The SLN debt was one of the points discussed in negotiations aimed at saving the nickel industry facing difficulties in New Caledonia.
When publishing its annual results on February 21, Eramet indicated that negotiations with France concerning SLN’s debt, estimated at 320 million euros, were very advanced.
“As far as SLN is concerned, the signing of the nickel pact is the next essential step to sustain the company’s activity,” Bercy said in its response to Reuters.
(Reporting Gus Trompiz; Dagmarah Mackos and Tangi Salaün, edited by Sophie Louet)
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