25 June 2012 15:37 [Source: ICIS news]
LONDON (ICIS)--The Croatian economy ministry will not be able to put in motion a rescue plan for the indebted Dioki Group until it finds a strategic partner ready to immediately invest €10m–15m ($13m–19m) in the low density polyethylene (LDPE) producer, the ministry said on Monday.
The sum would be required to recommence production at Dioki's sites in Zagreb and on the Adriatic island of Krk and kickstart some form of reciprocal state backing for the firm, it added.
The company's installations, including a 90,000 tonne/year ethylene cracker and a 200,000 tonne/year vinyl chloride monomer (VCM) plant, have been mothballed since the end of last year when Dioki's bank accounts were frozen following legal action from creditors.
On 19 June, the economy ministry conceded it had failed to persuade major creditors of Dioki to agree to a debt-to-equity restructuring deal that would have placed the company under their ownership and control.
Meanwhile, one possible strategic investor in Dioki had so far failed to commit to a deal because it was anxious that there were obscured debt liabilities within the company’s books, it added.
While efforts to save Dioki and the jobs of its 450 workers continued, the firm would probably be placed in official receivership but would not apply for liquidation, the ministry said.
($1 = €0.80)
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