Houlihan Lokey advises Ad Hoc Group of Volcan Noteholders
Houlihan Lokey is pleased to announce the successful closing of the exchange of Volcan Compañía Minera S.A.A.’s (Volcan) 4.375% Senior Notes due 2026 (the “Notes”) for new 8.750% Senior Secured Notes due 2030 (the “New Notes”) as part of a holistic liability management transaction that addressed Volcan’s $765 million indebtedness. Houlihan Lokey served as the exclusive financial advisor to an ad hoc group of the Notes (the “AHG”).
Volcan is a leading Peruvian diversified miner that produces zinc, lead and copper concentrates, silver, and gold. The company operates multiple mining complexes located in the departments of Cerro de Pasco, Junín, and Lima and is currently developing the Romina project, which is expected to have a transformational impact on Volcan’s production profile.
Despite a recovery in zinc and silver prices relative to lows in 2023, Volcan faced the near-term amortization payments due on its $400 million syndicated term loan in June 2024 and the approaching maturity of the Notes in February 2026.
Houlihan Lokey was engaged by the AHG to negotiate a holistic capital structure solution to provide Volcan with additional runway and flexibility to execute its business plan. Ultimately, the AHG and the company reached an agreement with respect to an uptier exchange transaction that provided for maturity extension through 2030 in exchange for a security package comprising most of the company’s assets and equity of subsidiaries, improved economics, call protection, and other credit enhancements.
The exchange transaction was launched on August 5, 2024, with the support of the AHG and closed on September 9, 2024, with the participation of 81.4% of noteholders. Along with a separately negotiated refinancing of the syndicated term loan, the transaction provided Volcan with a significantly extended maturity runway, robust flexibility to fund the development of Romina, and a pathway for meaningful deleveraging over time.