Creditors reject restructuring plan for Croatia's Dioki

20 June 2013 16:46  [Source: ICIS news]

LONDON (ICIS)--Creditors of Croatia-based polymers manufacturer Dioki have rejected the company's restructuring plan, the company’s management said on Thursday.

Creditors with claims to a total of 52.9% of Dioki's total debt – including national electricity provider HEP – voted against accepting the plan, it added.

Dioki's management will now attempt to propose a second version of the plan by 26 June, on which a creditors' vote would be taken in mid-July, the company said.

If no restructuring solution can be agreed and the company was forced to proceed to bankruptcy, “everybody will lose”, the management said in a statement after the vote.

The rejected plan proposed that through a combination of the cancellation of accrued interest and other fees related to creditors' claims – and a reduction in the principal sum owed – slightly more than one quarter of Dioki's debts of around Croatian kuna (HRK) 2bn ($355m, €267m) would be wiped out.

Dioki recommended that if creditors accepted the restructuring plan, Croatian oil and gas supplier Crodux Plin would enter Dioki as a strategic investor.

If a suitable restructuring plan was accepted, Crodux Plan stood ready to agree the immediate provision of €27m in working capital, including €2m for start-up costs, Dioki said. 

Dioki's Zagreb 50,000 tonne/year polystyrene (PS) installation and 15,000 tonne/year expandable polystyrene (EPS) plant, along with subsidiary Dina Petrokemija's 90,000 tonne/year low-density polyethylene (LDPE) unit – located in Omisalj on the Adriatic island of Krk – are three units which Crodux has said it believes could achieve acceptable profitability.

Dioki and Dina’s units have been mothballed since late 2011, when creditors froze the companies' bank accounts through a petition to the courts.

($1 = €0.75)

($1 = HRK5.63 , €1 = HRK7.48)

By: Will Conroy
+44 20 8652 3214

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