A short-term loan that will not solve the structural issues, describes the Société Le Nickel following the formalization of a loan granted by the State to SLN in the amount of 40 million euros. This expected and important announcement is also commented on by the political sphere, with this repeated need to agree on a country strategy for nickel.
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Press releases follow one another, starting with the one announcing the granting of the loan. 40 million euros, or 4.8 billion Pacific francs.
After Bercy’s announcement, the SLN itself explains that this must “enable it to meet its short-term cash payments”. The Nickel Company describes “emergency support allowing, together with the application of the emergency progress plan in progress implemented by the company, to remove the risk of cessation of payments.”
This short-term loan does not make it possible to respond to the company’s structural challenges, nor does it cover new production failures or a sudden downturn in the market. In addition, the loan will have to be repaid in 2024, like the previous ones.
Communiqué of the SLN, February 14
And the company points out: “For its part, the Eramet group – a 56% shareholder of SLN – continues to stand alongside its subsidiary and its employees. In this context, the existing overdraft authorization between the group and its subsidiaries has been extended to give SLN the flexibility it needs to better manage fluctuations in its liquidity.
In such a context, continues the press release from Doniambo, “this emergency financial support is complementary to the exceptional efforts defined by SLN for the year 2023 and whose implementation has already begun”. The “Old Lady” makes a long list:
- “Suspension of investment projects, societal contributions, explorations, studies, dismantling works”;
- “Limitation of maintenance work to what is strictly necessary”;
- “Temporary salary efforts and control of personnel costs”;
- “Acceleration of structural measures: resizing of organisations, renegotiation of subcontracting contracts, renegotiation of payment terms and reduction of inventories, sale of assets.”
Because, she recalls, “An internal emergency progress plan is being implemented to drastically reduce costs and focus efforts on production, the essential first step in rescuing the company.” More “the implementation of the emergency progress plan alone does not make it possible to reduce SLN’s critical cash situation.” This is where the famous state loan comes in.
“As soon as the liquidity crisis is temporarily resolved thanks to the combination of the loan and the savings made under the emergency progress plan, SLN intends to quickly find answers to the company’s two structural problems to ensure its solvency, namely the competitiveness of the Doniambo plant, in particular via access to competitive and stable energy, and access to the mining sector under normal conditions.”
“It was expected”commented for his part Louis Mapou, guest of the morning on Tuesday, recalling however that the sum first mentioned was more substantial. “Yes, it’s a breath of fresh air.” And to recall that New Caledonia and the SLN committed last year to a common strategic vision. “We asked SLN to define what the outlook would be since we were asked to grant additional mineral exports. For the moment, we are far from the mark. This state aid can indeed help to make it out.” It remains for elected officials to define a lasting solution and agree on a “country” strategy.
Read more in the summary of this interview.
There is no longer any reflection within the GTPS – the working group of presidents and signatories of the Nouméa agreement – responsible for carrying out this work”
Louis Mapou, President of the Government
“The difficulty in this kind of moment is to consider that it is still normal to receive state aid”says Nicolas Metzdorf, interviewed by Sheima Riahi. “State aid on the question of nickel in Caledonia remains an exceptional aid which should enable us to realize that we must find the path to economic profitability with our three factories. And in particular that of Doniambo”continues the deputy of the second constituency.
“Because each time, we will not be able to beg for the generous hand of the Republic to help us get out of the crises we are experiencing in our main industries. It is now up to Caledonian officials to define a real strategic nickel policy across the country so that, finally, he concludes, it no longer depends on the generous support of France and the government of Emmanuel Macron in particular.”
I hope that this announcement will be able to launch the work on this strategic policy, in particular through the groups linked to the institutional future.
Nicolas Metzdorf, deputy.
Remarks to which his group of Loyalists adds in another press release.
