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(Alliance News) - Synthomer PLC on Tuesday said it is planning to offer EUR520 million of unsecured senior notes due 2025 in order to refinance its bridge facility.
Shares in Essex-headquartered Synthomer were up 3.2% at 282.40 pence in London in morning trading.
The notes are to be unconditionally guaranteed by certain of Sythomer's subsidiaries and the EUR520 million will be used to refinance the aqueous polymers supplier's existing EUR520 million bridge facility.
The bridge facility was introduced in 2019 as part of Synthomer's USD824 million acquisition of specialty chemicals firm Omnova Solutions Inc.
Funds from the note offer will also be used to cover some of the costs, fees, and expenses of the note offering, the company added.
Synthomer said the Omnova acquisition established the company "as a global speciality chemicals company with significant scale and a strong platform from which to invest in future growth" and is on track to produce USD29.6 million worth of synergies with a 50% run rate at the end of 12 months.
Following the note issue, Synthomer expects it will have "a long term and sustainable financing structure". It currently has "significant leverage covenant headroom" and its liquidity is underpinned by a EUR460 million revolving credit facility and term loan bank facilities totalling USD260 million.
Volumes in April and May have been hit by Covid-19. Although demand for nitrile latex, non-wovens, and adhesives stayed strong, sales into industrial markets were reduced. Overall, volumes dropped 20% from "a strong comparative period" though started to strengthen in late May.
By Anna Farley; annafarley@alliancenews.com
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