BorsodChem denied state loan amid Yantai Wanhua discussions

02 October 2009 11:51  [Source: ICIS news]

PRAGUE (ICIS news)--Hungary’s government has opted not to extend a state bail-out loan to financially embattled isocyanates and polyvinyl chloride (PVC) producer BorsodChem, the Hungarian Ministry for National Development and the Economy said on Friday.

The announcement came after BorsodChem’s majority owner, UK-based private equity firm Permira Advisers, released on 1 October a proposed rescue plan for the company that included a desired loan of €100m ($144.9m) from Hungarian state-owned development bank MFB.

Ruling out direct or indirect state loans for BorsodChem, the ministry said it was “closely monitoring” negotiations between Permira, China’s Yantai Wanhua – which analysts believe is likely to make a hostile bid for BorsodChem – and BorsodChem’s lenders.

The ministry appealed to the parties “to think long term” in planning the company’s future.

“In the current situation, the government does not wish to interfere actively in the discussions between the market players,” said the ministry.

If state intervention were necessary to protect jobs at BorsodChem, the government would be prepared to negotiate once the company’s ownership structure was clear, the ministry said.

($1 = €0.69)

For more on isocyanates and PVC, visit ICIS chemical intelligence
Read Paul Hodges’ Chemicals and the Economy Blog
To discuss issues facing the chemical industry visit ICIS connect

By: Will Conroy
+44 20 8652 3214

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly