DyStar sale to Kiri stalls; Chinese firm shows interest

20 January 2010 17:42  [Source: ICIS news]

TORONTO (ICIS news)--The planned sale of insolvent German textile and leather chemicals major DyStar to India’s Kiri Dyes and Chemicals has stalled, but a Chinese chemicals firm is now showing interest in three of DyStar’s five German sites, officials said on Wednesday.

“So far, Kiri has yet put any money on the table,” Gabriele Wunnenberg, a spokesperson for one of DyStar's insolvency administrators told ICIS news.

Kiri, which last month agreed to acquire four DyStar sites – Frankfurt, Leverkusen, Brunsbuttel and Ludwigshafen – seemed to have difficulties in arranging financing, Wunnenberg said.

However, China’s Hubai Chuyan Chemical has shown interest in acquiring the Frankfurt, Brunsbuttel and Leverkusen sites, she said.

Kiri remained in the running, Wunnenberg said. But as long as it could not get financing, the insolvency administrators would keep “all options open”, she said.

One stumbling block for both Kiri and Hubai were environmental and related liabilities at DyStar’s facilities at Leverkusen and Brunsbuttel, which DyStar was leasing from LANXESS, she said.

The parties were trying to determine who would bear those costs if the plants were to be closed permanently, she said.

Neither Kiri nor Hubai were interested in DyStar’s site at Geretsried, in Bavaria, she added.

As for production, at this time only the Ludwigshafen site, which makes indigo, was producing; the remaining sites were closed, she said.

German industry commentators said that Kiri and Hubai seemed to be more interested in acquiring DyStar’s know-how, rather than in continuing production in Germany in the long run.

DyStar employed a staff of about 1,300 in Germany before its insolvency. About 800 of those jobs may have been saved under the deal with Kiri.

Two DyStar operating firms and a holding firm filed for insolvency in September, with a court appointing separate preliminary insolvency administrators for each unit.

DyStar is one of the largest producers in the global textile chemicals industry, along with firms such as Huntsman and Clariant.

It was formed in 1995 out of the textile dyes businesses of Bayer and former German chemicals major Hoechst. In 2000, BASF integrated its dyes business into DyStar.

In another major German insolvency case, the sale of textile fibres producer Trevira to two investors fell through late last year.  However, Trevira’s insolvency administrators managed to obtain bank financing, which kept the company producing.

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By: Stefan Baumgarten
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