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| Wanhua in talks with Permira over Borsodchem |
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One of China’s biggest chemicals groups has held talks with Permira about acquiring a stake in a Hungarian company owned by the UK buy-out fund, according to people familiar with the matter.
Wanhua Industrial Group is seeking to invest in Borsodchem, which Permira acquired for €1.6bn ($2.3bn) in 2006 as part of its strategy to globalise its sales and production operations.
Investors who hold Borsodchem’s debt are in talks to help refinance the company and the Chinese group has taken part in these discussions with the aim of emerging with an equity holding.
People familiar with the talks said Wanhua had gained a seat at the table of by acquiring a large chunk of Borsodchem’s mezzanine debt from UK and US investors. Wanhua’s interest underscores how China’s largest chemical makers are seeking to expand beyond Asia in the search for new markets. “Wanhua would like to acquire an equity stake in Borsodchem and to eventually take control,” said one person familiar with the matter.
The Chinese group is understood to have bought about two-thirds of the Hungarian group’s €200m of mezzanine loans for about 25 cents in the dollar from European Capital and Alcentra.
The purchases were carried out via Hong Kong-based investment funds linked to Wanhua, said people familiar with the deal.
Wanhua, majority-owned by the mainland province of Shandong, makes plastics products, and is Asia’s largest producer of MDI, a polyurethane used in construction, refrigeration, furniture and transport. According to its website, Wanhua employs 2,000 staff at three sites and last year posted sales of Rmb7.7bn and net profits of Rmb1.6bn.
One person familiar with the matter said Wanhua believed that Borsodchem would benefit from a tie-up with the Chinese company because the latter would bring fresh technology and capital investment that would help to preserve jobs.
In an unusual move, the state-owned Hungarian Development Bank has offered a €100m loan to Borsodchem as part of the planned debt restructuring. The government loan will help the group to complete a new chemicals plant.
Senior lenders, including Royal Bank of Scotland, Erste Bank, RZB and UniCredit, are being asked to roll up interest payments, delaying their cash payment until their loans mature. Borsodchem has about €1.1bn of debt. Permira said it was “focused on completing a consensual restructuring.”
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Source: FT.com; 20090908 |
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