Poland's Ciech accepts ZAP bid for Fosfory Ciech stake

16 December 2010 12:57  [Source: ICIS news]

PRAGUE (ICIS)--Ciech has accepted a binding bid for its 89.46% stake in phosphorous fertilizer unit Fosfory Ciech from Zaklady Azotowe Pulawy (ZAP), the Polish companies announced on Thursday.

ZAP, which is Poland's largest fertilizer company, would pay around zlotych (Zl) 107.2m ($35.5m, €26.9m) for the stake and take on the obligation to repay loan sums owed by the subsidiary to Ciech amounting to Zl 120.6m, Ciech said.

Ciech, which is Poland's largest chemical company, added that the agreed sale of the unit, in the Baltic port city of Gdansk, meant it had now raised enough capital to meet a refinancing condition set by a group of banks which required it to reduce its debts of more than Zl 1.5bn by Zl 400m by the end of March 2011.

"We are very pleased with the fact that we managed to negotiate a good price for these assets that are not related to the main activities of the Ciech group. I believe that our colleagues at ZAP are also very pleased, since this is an agreement that will be beneficial to both parties," said Ciech CEO Ryszard Kunicki.

"This is another transaction that shows that we are consistently implementing a programme to restructure the group and improve its financial standing," he added.

In addition to ZAP, five other expressions of interest from Poland and abroad were made about acquiring Fosfory Ciech, also known as GZNF Fosfory, Ciech said.

Poland's treasury ministry has committed to relaunching the privatisation of Ciech - postponed indefinitely earlier this year - in 2011 if its restructuring makes good headway.

ZAP, which makes nitrogen fertilizers and is also a global melamine and caprolactam player, said it was attracted to Fosfory Ciech by both its production lines and port infrastructure.

"The decision of the board of ZAP to make a bid was in line with the strategy of achieving organic growth and an increased scale of operations through the use of mergers and acquisitions at home and abroad, and by developing the product portfolio," ZAP said.

ZAP, which is currently in the latter stages of a privatisation tender, was disappointed in June when Poland's PKN Orlen rejected its bid for nitrogen fertilizer and polyvinyl chloride (PVC) unit Anwil.

Fosfory Ciech has an annual fertilizer capacity of 400,000 tonnes. It also produces sulphuric and phosphoric acid.

($1 = Zl 3.02, €1 = Zl 3.99)

To discuss issues facing the chemical industry go to ICIS connect

By: Will Conroy
+44 20 8652 3214

AddThis Social Bookmark Button

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

Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index

Related Articles