30 March 1998 00:00 [Source: ICB]
Chemapol is to begin restructuring Spolana, the debt ridden fibres and plastics group in the Czech Republic, after buying a 38% stake owned by the state National Property Fund. But doubts are already surfacing about how Chemapol is to integrate Spolana into its chemical operations and that a sale to Unipetrol would have made more sense.
Until the fall of the last government in November 1997, the sale of the NPF stake was earmarked for state-owned Unipetrol and industry observers say that a sale to Unipetrol would have been better. Unipetrol supplies Spolana with many of its raw materials, creating the possibility for vertical integration synergy.
Chemapol owns 85% of Spolana with the remainder listed on the Prague Stock Exchange. It will integrate Spolana into New Company, the chemical grouping being formed by the restructure of the Chemapol group.
It is thought that Chemapol offered better terms for the NPF stake and is said to have paid three times the market value. Debts in Spolana are in excess of Koruna3.8bn ($111m), while Chemapol is struggling to find the funds to complete its restructuring.
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