Chinese buyer for Poland's TDI maker Zachem 'sought by ministry'

25 September 2012 16:06  [Source: ICIS news]

LONDON (ICIS)--Poland's treasury ministry is actively searching for a Chinese investor that may buy Zachem, the loss-making toluene di-isocyanate (TDI) subsidiary of the state-controlled Ciech chemical group, a source at the ministry said on Tuesday.

The possibility of a Chinese purchase of the company will be discussed with a trade and investment delegation from China that is scheduled to visit Poland, he added.

In May, China's Wanhua Industrial Group and Hungarian isocyanates subsidiary BorsodChem said they had no present interest in acquiring Zachem.

The confirmation of the ministry's new push to sell Zachem came as unions at Ciech announced that they had protested to treasury minister Mikolaj Budzanowski about the latest consequences of the company's new restructuring drive under new managers.

Employees had been wrongfully stripped of collective bargaining rights, according to the unions.

With zlotych (Zl) 300m ($93.5m, €72.3m) in debt to Ciech and an earnings before interest, tax, depreciation and amortisation (EBITDA) loss of Zl 60m in 2011, “Zachem remains the most troublesome of Ciech's subsidiaries”, said Piotr Drozd, an analyst at investment bank WOOD & Company, in a note to investors.

“Unless an investor emerges, with Zachem's low production efficiency (aged technology) and poor financial situation, liquidation may be the only viable option,” he added.

Ciech was not immediately available for comment.

($1 = €0.77)
($1 = Zl 3.21, €1 = Zl 4.15)

By: Will Conroy
+44 20 8652 3214

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