An ad hoc group of holders of Volcan Compania Minera‘s (Caa3/CCC-) outstanding USD 365m 4.375% 2026 bonds has hired Houlihan Lokey as financial advisor and Davis Polk & Wardwell as legal advisor ahead of a potential debt renegotiation, according to two sources familiar with the matter.

The Peruvian mining company said it was working on a reprofiling of both its USD 400m syndicated loan and the 2026 bonds. It would like to obtain extensions for each, and is working with advisors BofA Securities, Moelis and Shearman & Sterling.

A USD 35m payment on Volcan’s syndicated loan in April kicks off a series of quarterly amortizations which total USD 105m in 2024, USD 135m in 2025, and USD 160m in 2026.

Volcan managed to pay the 2026 notes’ February coupon, according to a bondholder.

The hiring of advisors on both sides arrives at a time when the company is going through turmoil at the board level. In October 2023, shareholders designated Victoria Soyer as chairman, replacing Jose Picasso while Diego Garrido-Lecca was appointed vice president in replacement of Jose Ignacio de Romana. Three lawsuits have been filed in Lima against the company’s board since January, by minority shareholders, in an attempt to reverse the changes.

Glencore, Volcan’s majority shareholder, has objected to the claims and is looking for a USD 1m payment from one of the minority shareholders that filed the claims citing reputational damage against Glencore and Volcan, according to a 31 January court document.

Volcan presented its 4Q23 results on 15 February, showing a 17.5% year-on-year improvement in EBITDA and a net income of USD 1m, compared with a net loss of USD 76.9m in 4Q22.

The 2026 notes last traded today, 16 February, at 56.3 to yield 37.728%, according to MarketAxesss.

Representatives for Houlihan Lokey and Davis Polk declined to comment on the matter or did not respond to requests for comment.