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Loans and financings | 12 Months Ended
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Dec. 31, 2024
Loans And Financings |
Loans and financings |
| 24 | Loans and financings
Accounting policy Loans and financings are initially recognized at fair value, net of transaction costs incurred, and are subsequently measured at amortized cost, unless they are designated as fair value option, if necessary to eliminate the accounting mismatch that would arise if amortized cost were used. Any difference between the proceeds (net of transaction costs) and the total amount payable is recognized in the income statement as interest expense over the period of the loans using the effective interest rate method, except for the loans measured at fair value. Loans and financings are classified as current liabilities unless the Company has the unconditional right to defer repayment of the liability for at least 12 months after the reporting period. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the drawdown occurs. To the extent that there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalized as a prepayment for liquidity services and amortized over the period of the facility to which it relates.
| (a) | Composition
Schedule of analysis of the loans and financings |  |  |  |  |  |  |
|  |  |  |  | Total |  | Fair value
|  |  |  | 2024 | 2023 | 2024 | 2023
Type | Average interest rate | Current | Non-current | Total | Total | Total | Total
Eurobonds – USD | Pre-USD 6.43% | 20,399 | 1,210,730 | 1,231,129 | 1,212,554 | 1,247,522 | 1,207,918
BNDES | TJLP + 2.82% SELIC + 3.10% TLP - IPCA + 5.84% | 23,072 | 154,325 | 177,397 | 208,947 | 156,565 | 187,796
Export credit notes | SOFR TERM + 2.50% SOFR + 2.40% | 2,385 | 181,750 | 184,135 | 237,862 | 184,737 | 237,791
Debentures | CDI+ 1.50% | 3,040 | 104,270 | 107,310 | - | 105,012 | -
Other |  | 1,987 | 60,675 | 62,662 | 66,203 | 58,779 | 64,497
|  | 50,883 | 1,711,750 | 1,762,633 | 1,725,566 | 1,752,615 | 1,698,002
Current portion of long-term loans and financings (principal) | 20,811 |  |  |  |  |
Interest on loans and financings | 30,072 |  |  |  |  |
| (b) | Loans and financing transactions during the year ended on December 31, 2024
In March 2024, Nexa Recursos Minerais (Nexa BR) entered into a Note agreement in the total principal amount of EUR 27,917 thousand (approximately USD 30,244) at an annual gross interest rate of 5.6% p.a., maturing in June 2024. Additionally, a global derivative contract was established to swap the currency fluctuation of the euro to hedge this loan operation, with a notional value of EUR 27,917, maturing on June 3, 2024, and a coverage percentage of 100% at a cost of CDI (Interbank Certificate of Deposit) + 0.90%. Both contracts were classified as fair value through profit or loss. On June 3, 2024, the Note Agreement was settled in cash, with a total payment of USD 30,683 (EUR 28,234), comprised of USD 30,244 of principal and USD 360 of interest expenses, including USD 79 of exchange variation. On April 2, 2024, Nexa BR concluded a debenture issuance in the amount of BRL 650,000 (approximately USD 130,099), with an annual interest rate of CDI plus 1.50% p.a., for a 6-year term with semi-annual payments. The debenture was issued under the "Private Instrument of Indenture of the 1st (First) Issuance of Simple Debentures” and submitted for registration with the Brazilian Securities Commission ("CVM") under the automatic distribution registration procedure, pursuant to CVM Resolution 160. The Debenture is characterized as “ESG-linked debentures”, as the Company will have an option of redemption or amortization premium in case it meets certain agreed upon ESG goals. Early redemption of the full notes or anticipated amortization options will be available from April 1, 2026, subject to an annually decreasing payment of a premium. This premium could be reduced if Nexa meets the annual 2025-2028 greenhouse gas emission reduction targets outlined in Nexa’s ESG goals framework. On April 9, 2024, the Company concluded a bond offering in the amount of USD 600,000, for a period of 10 years, at an interest rate of 6.75% per year, and used the proceeds to repurchase part of its 2027 and 2028 notes in a concurrent tender offer. On June 12, 2024, Nexa BR drew from BNDES (Brazilian national bank for economic and social development) an ESG credit line linked to the continuous improvement of the Company's environmental and social indicators, in the amount of BRL 200,000 (approximately USD 40,030), maturing in March 2032. The amortization will occur in 72 consecutive installments after a 2-year grace period provided in the contract, at an annual cost of IPCA plus 5.41% p.a., and a spread rate of 1.84%. After the 2-year grace period, the spread rate of 1.84% can be reduced to 1.44% if ESG goals are met, otherwise, the rate is increased to 2.84%. Bonds repurchase On April 10, 2024, the Company repurchased USD 484,504 of its 2027 Notes, or 69.2% of the total outstanding principal amount. In connection with the 2027 tender, the Company paid USD 11,285 in accrued interest, with a total disbursement of USD 495,789. Additionally, related to this transaction, the Company amortized the proportional portion of debt issue costs in the amount of USD 2,605. On April 15, 2024, concluding the Tender Offer, the Company repurchased a portion of its 2028 Notes, in the amount of USD 99,499, or 19.9% of the total outstanding principal amount. Along with this repurchase, the Company paid USD 1,563 in accrued interest and a premium of USD 1,989, totaling a disbursement of USD 103,051. Furthermore, on the transaction date, the Company also amortized the proportional portion of debt issue costs in the amount of USD 743. By December 2024, Nexa had a total expense of USD 7,069 (Note 10) regarding bond repurchases (including USD 1,732 in agent fees). Following these transactions, the remaining outstanding principal amounts are USD 215,496 for the 2027 Notes and USD 400,501 for the 2028 Notes.
| (c) | Changes in the year
Schedule of movements in loans and financings |  |  |
| 2024 |  | 2023
Balance at the beginning of the year | 1,725,566 |  | 1,669,259
New loans and financings- note 24 (b) | 799,439 |  | 56,408
Debt issue costs | (7,577) |  | (74)
Interest accrual | 130,896 |  | 112,612
Amortization of debt issue costs | 6,182 |  | 2,362
Changes in fair value of loans and financings - note 10 | 3,627 |  | 525
Changes in fair value of financing liabilities related to changes in the Company's own credit risk | 1,572 |  | 583
Debt modification gain - note 24 (g) | (3,142) |  | -
Payments of loans and financings | (681,475) |  | (27,087)
Foreign exchange effects | (84,387) |  | 23,996
Interest paid on loans and financings | (128,068) |  | (113,018)
Balance at the end of the year | 1,762,633 |  | 1,725,566
| (d) | Maturity profile
Schedule of maturity profile of the loans and financings |  |  |  |  |  |  |
|  |  |  |  |  |  | 2024
| 2025 | 2026 | 2027 | 2028 | 2029 | As from 2030 | Total
Eurobonds – USD (i) | 20,399 | (2,609) | 216,328 | 399,896 | (541) | 597,656 | 1,231,129
BNDES | 23,072 | 23,642 | 16,714 | 16,714 | 12,142 | 85,113 | 177,397
Export credit notes | 2,385 | (398) | 89,591 | (419) | 92,976 | - | 184,135
Debentures | 3,040 | (164) | (164) | (164) | (164) | 104,926 | 107,310
Other | 1,987 | 1,779 | 1,779 | 51,779 | 1,779 | 3,559 | 62,662
Total | 50,883 | 22,250 | 324,248 | 467,806 | 106,192 | 791,254 | 1,762,633
(i) The negative balances refer to related funding costs (fee) amortization.
| (e) | Analysis by currency
Schedule of analysis of the loans and financings, by currency |  |  |  |
|  |  | 2024 | 2023
| Current | Non-current | Total | Total
USD | 22,954 | 1,442,480 | 1,465,434 | 1,446,225
BRL | 27,929 | 269,270 | 297,199 | 279,341
| 50,883 | 1,711,750 | 1,762,633 | 1,725,566
| (f) | Analysis by index
Schedule of analysis of the loans and financings, by index |  |  |  |
|  |  | 2024 | 2023
| Current | Non-current | Total | Total
Fixed rate | 20,399 | 1,210,730 | 1,231,129 | 1,212,554
SOFR | 2,557 | 231,750 | 234,307 | 233,671
TLP | 12,000 | 146,052 | 158,052 | 174,000
CDI | 3,040 | 104,270 | 107,310 | 54,385
TJLP | 5,439 | 13,374 | 18,813 | 26,511
BNDES SELIC | 7,448 | 5,574 | 13,022 | 24,445
| 50,883 | 1,711,750 | 1,762,633 | 1,725,566
| (g) | Export Credit Note rollover
In March 2024, the Company renegotiated a term loan with a principal amount of USD 90,000, maturing in October 2024, and with a cost based on the three-month term SOFR (“Secured Overnight Financing Rate”) plus 1.80% p.a. The renegotiated debt with the same counterparty has a maturity of February 2029 and a cost of three-month term SOFR plus 2.40% p.a. This transaction has been accounted for as debt modification, and a gain of USD 3,142 as disclosed in Note 9.
| (h) | Guarantees and financial covenants
The Company has certain loans and financing agreements subject to certain financial covenants at a consolidated level, such as (i) leverage ratio and (ii) capitalization ratio, and (iii) debt service coverage ratio that are measured annually at the end of each reporting period. When applicable, these compliance obligations are standardized for all debt agreements. In the event of non-compliance with any of the financial covenants, the Company has the possibility of remedying it by granting real guarantees, surety bonds, or presenting bank guarantees for the total outstanding balances, within a period ranging from 60 (sixty) to 120 (one hundred and twenty) days from the date of the filing of the consolidated financial statements or the date of the formal written communication issued by the bank, after bank has received the covenant performance report from the Company, depending on each contract. In case the Company fails to provide any of the remedial measures within the stipulated period, it may result in an event of early maturity of the loans. As a result, the Company may lose the right to defer the payments for more than 12 months and, consequently, may have to classify the loans as current. As of December 31, 2024, the Company did not comply with one of the financial covenants included in the BNDES loan agreements, referring to the capitalization ratio, which is measured as Equity/Total Assets, and must be equal to or greater than 0.3. This non-compliance is primarily due to losses accumulated in the last three years, impairment losses, one-off events, and negative impacts resulting from the extended ramp-up phase of Aripuanã. The debt continues to be presented as non-current, as the Company obtained bank guarantees prior to December 31,2024. In addition, on February 19, 2025 (subsequent event), the Company obtained a waiver for this covenant comprising the period of December 31, 2024 to December 31, 2025. The Company remains committed to adopt measures to ensure compliance with all financial ratios and covenants in the up-coming periods, including the review of its capital structure, the implementation of initiatives to improve operational performance and the reduction of risk exposure. Except for BNDES discussion above, no relevant changes to the contractual guarantees occurred in the year ending on December 31, 2024.

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