Chiho-Tiande finalizes deal with Scholz Holding

Chiho-Tiande Group Ltd, (CTG) http://www.chiho-tiande.com a scrap metal recycling firm headquartered in Hong Kong, and Scholz Holding GmbH, a recycling company headquartered in Germany, have entered into a restructuring agreement in relation to financing to assist Scholz restructure the significant debt it has incurred over the past several years.

According to CTG, the agreement between the two companies includes the following: the finalization of terms of a bridging loan; an amendment to the maturity dates, and partial waiver, of Scholz’s debt; and the intended acquisition, and waiver, of a TTC loan. The restructuring agreement would maintain Scholz's scope of business prior to a potential equity acquisition by Chiho-Tiande and enhance Scholz's financial performance in the long-term.

Chiho Renewable Development Ltd, (CRDL) an indirect wholly-owned subsidiary of CTG, and Scholz Recycling GmbH & Co. KG, a wholly-owned subsidiary of Scholz, also entered into a bridging loan agreement for the provision of loan amounting up to EUR 80 million (US$88 million). The amount represents an increase of EUR 30 million (US$33 million) from what was initially set out in the debt purchase agreement in order to enable Scholz to meet its liquidity requirements without increasing the overall commitment by the CTG.

CTG and Chiho-Tiande Resources Ltd., (CTRL) an indirect wholly-owned subsidiary of the group, also have agreed to amend and extend the maturity dates of certain loans under the debt. The maturity date of the outstanding nominal value of the debt amounting to about EUR 224 million (US$246 million) is to be extended beyond Jan. 31, 2017 and the date when the last closing condition under the restructuring agreement is fulfilled or waived. In addition, CTRL will agree to irrevocably waive the EUR 224 million debt and the relevant interest in a debt waiver agreement which will be entered into with Scholz on the restructuring closing date.

As a strategic restructuring step, CRDL also intends to acquire a EUR 60 million TTC loan from Scholz under a separate agreement prior to the restructuring closing date, and to enter into a loan waiver agreement with immediate effect on the restructuring closing date.

“The new structure is deemed necessary to facilitate the significant deleveraging of Scholz and maintain a sustainable and profitable development of that company in the future,” says Tu Jianhua, chairman of CTGL, says. “The provision of the bridging loan and restructuring agreement are part of a series of steps to prepare for the potential acquisition of Scholz Group. The acquisition of one of the largest European-based global networks of companies and affiliates active in the field of treating and processing scrap metal can expand our business by accessing upstream materials supplies and technology as well as tapping European markets. Thus we are confident we can gain greater growth momentum in order to boost our returns on the investment, and ultimately deliver satisfactory returns to our shareholders in the future.”