04 March 2013 13:45 [Source: ICIS news]
LONDON (ICIS)--Swiss-based industrial company Klesch Group said on Monday that it is seeking €310m ($402.6m) in compensation from French chemicals major Arkema for “misrepresentations” in the sale of its vinyls business.
The company acquired the business unit – now known as Kem One – from Arkema in July 2012, but now claims that it has discovered significant gaps between the financial information presented by Arkema’s management during sale negotiations and the company’s current financial results.
“Had Klesch known of these misrepresentations at the time of negotiations, it would not have entered into the transaction under the terms agreed,” the company said in a statement.
The company is requesting compensation for the alleged financial shortfalls in Kem One’s balance sheet, and has not ruled out asking the arbitration court to annul the transaction.
Klesch stressed that it is seeking arbitration for misrepresentations regarding Kem One SAS and not Kem One Innovative Vinyls, the company’s downstream business, which it claims is performing satisfactorily.
Arkema has refuted the claims, stating that the negotiations were fully transparent.
The company said: “Arkema confirms that the Klesch group had access, in complete transparency and throughout the negotiations, to all the necessary information – as customary for this type of transaction – to enable it to assess the financial situation and the prospects of this activity, and performed the in-depth due diligence that it wanted.
“Arkema is all the more surprised given that throughout the eight months since the divestment, the Klesch group has raised no issue with Arkema. Arkema vigorously rejects these totally unfounded accusations, and is fully confident in its ability to demonstrate this,” Arkema added.
Arkema’s statement that no issues have been raised by Klesch contradicts the Swiss company’s claim that it had “no option” but to pursue arbitration “after several months of fruitless negotiation”.
($1 = €0.77)
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