IMERYS (EPA:NK) - Imerys reaches an agreement for a proposed resolution of historic talc-related liabilities

Transparency directive : regulatory news

15/05/2020 07:30

PRESS RELEASE

PARIS, MAY 15, 2020

Imerys reaches an agreement for a proposed resolution of historic talc-related
liabilities

Imerys SA ("the Group") today announced that it, along with the North American
talc subsidiaries (Imerys Talc America, Imerys Talc Vermont and Imerys Talc
Canada) and Imerys Talc Italy SpA(1) (collectively, the "Talc Subsidiaries"),
have reached an agreement to resolve historic talc-related liabilities with
representatives of existing and potential future claimants.

This agreement is documented in a joint Plan of Reorganization (the "Plan")
which was filed today in the United States Bankruptcy Court for the District of
Delaware, where the North American Talc Subsidiaries' chapter 11 proceedings
are pending.

The Plan provides that once the necessary approvals have been obtained, the
Talc Subsidiaries will emerge from the chapter 11 process and the Group will be
released from all existing and future talc-related liabilities arising out of
the Talc Subsidiaries' past operations, as such liabilities will be channeled
into a dedicated trust.

The approval process for the Plan includes an affirmative vote by the requisite
majority of talc-related claimants(2), followed by a confirmation and final
approval from the applicable US courts. Since the terms of the Plan have been
agreed with representatives appointed by the bankruptcy court to represent
(existing and future potential) talc-related claimants, it is expected that the
Plan could be approved in time for the Talc Subsidiaries to emerge from chapter
11 before the end of 2020.

Under the proposed Plan and concurrently with its approval process, the North
American Talc Subsidiaries(3) will initiate a sale process for their assets to
which the Group will be allowed to participate. Completion of the sale is
expected to occur during the fourth quarter of 2020, around the time of the
approval process for the Plan.

The Group's contribution to the Plan will consist of (i) a minimum cash payment
of USD $75 million, (ii) an additional amount of up to USD $102.5 million
subject to a reduction mechanism proportionate to the sale price for the assets
of the North American Talc Subsidiaries, and (iii) certain other components
further outlined in the Plan(4).

Overall, the Plan is not expected to materially affect the Group's financial
situation, profitability, and cash generative business profile. A provision of
EUR250 million was initially accrued in Imerys' 2018 consolidated financial
accounts, knowing that the North American Talc Subsidiaries have been
deconsolidated since February 13, 2019. The balance of this provision, which
amounts to USD $114 million, is considered as appropriate to cover the expected
financial impact of the Plan for the Group. This assessment takes into account
the expected market value of the North American Talc Subsidiaries(5), but
remains subject to the uncertainty related to a sale of assets in a difficult
economic environment.

The Plan and associated approval process will not materially affect the
business operations, employees, or customers of the Group and the relevant Talc
Subsidiaries, which intend to operate as usual during their ongoing chapter 11
process.

(1)Imerys Talc Italy has been named in a few outstanding talc related lawsuits
in the United States.
(2)Upon the grant of this vote and as contemplated under the Plan, Imerys Talc
Italy SpA intends to file for chapter 11 protection and join the Plan in order
to benefit from the same global and permanent resolution of historic
talc-related liabilities as the North American Talc Subsidiaries.
(3)Imerys Talc Italy's business is not included in this sale and will remain
part of the Group throughout and after closing of the chapter 11 proceedings.
(4)Such as certain insurance assets, financing of minor unsecured trade claims
(USD $5 million) or certain potential excess administrative costs of the North
American Talc Subsidiaries up to a maximum of USD $15million..
(5)The North American Talc Subsidiaries generated revenue of USD $162 million
and EBITDA of USD $34 million in 2019.

"Today's announcement marks an important step toward a permanent resolution of
historic talc-related liabilities," said Alessandro Dazza, Imerys' Chief
Executive Officer. "The Plan, once approved by the relevant Courts, represents
a favorable outcome for the Group and the Talc Subsidiaries, and will enable
the Group to focus on its current operations and move forward free from these
past liabilities."

For more information on the terms of the Plan, as well as the North American
Talc Subsidiaries' announcement, please visit www.ITArestructuring.com.

The world's leading supplier of mineral-based specialty solutions for industry
with EUR4.4 billion in revenue and 16,300 employees in 2019. Imerys delivers
high value-added, functional solutions to a great number of sectors, from
processing industries to consumer goods. The Group draws on its understanding
of applications, technological knowledge and expertise in material science to
deliver solutions by beneficiating its mineral resources, synthetic minerals
and formulations. Imerys' solutions contribute essential properties to
customers' products and their performance, including heat resistance, hardness,
conductivity, opacity, durability, purity, lightness, filtration, absorption
and water repellency. Imerys is determined to develop responsibly, in
particular by fostering the emergence of environmentally-friendly products and
processes.

More comprehensive information about Imerys may be obtained from its website
(www.imerys.com) in the Regulated Information section, particularly in its
Registration Document filed with the French financial markets authority
(Autorité des marchés financiers, AMF) on March 24, 2020 under number
D.20-0165 (also available from the AMF website, www.amf-france.org). Imerys
draws investors' attention to chapter 4 "Risk Factors and Internal Control" of
its Registration Document.

Disclaimer: This document contains projections and other forward-looking
statements. Investors should be aware that such projections and forward-looking
statements are subject to various risks and uncertainties (many of which are
difficult to predict and generally beyond the control of Imerys) that could
cause actual results and developments to differ materially from those expressed
or implied.

The present document is a translation of the French language version provided
solely for the convenience of English-speaking users. In all matters of
interpretation, views or opinions expressed in the original language version of
the document in French take precedence over the translation. Only the French
language version is binding.

Analyst/Investor Relations:

Vincent Gouley: +33 (0)1 49 55 64 69
finance@imerys.com

Press contacts:

Claire Lauvernier: +33 (0)1 49 55 66 65
Hugues Schmitt (DGM Conseil): +33 (0)1 40 70 11 89

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IMERYS (EPA:NK) - Imerys reaches an agreement for a proposed resolution of historic talc-related liabilities

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