BorsodChem Gets Wanhua Financing, May be Acquired in the Future

Hungary’s BorsodChem chemicals group has secured a sizable amount of funding to help stabilize its liquidity and build a new production facility. The funding comes by way of an initial €30 million financing package from China’s Wanhua Industrial Group designed to help BorsodChem restructure its current debt load.

Once restructuring is complete Wanhua may exercise an option to spend an additional €110 million and acquire the full BorsodChem stake now owned by Permira and Vienna Capital Partners. That option could be triggered sometime within the next two years despite Permira’s insistence that it would hold on to its stake for another 3-4 years.

As the region’s largest employer with a workforce of nearly 2,700, BorsodChem has been working on a debt restructuring plan for at least the last year. Creditors must still approve the Wanhua deal but they are not expected to resist. Should an eventual acquisition be realized Wanhua intends to continue with the company’s current management while utilizing Vienna Capital’s knowledge and experience in revitalizing BorsodChem.

Borsodchem (www.borsodchem.hu)
Borsodchem is a Hungarian chemical company based in Kazincbarcika and employing nearly 4,000 people. Since its inception in 1991 Borsodchem has been a producer of various plastic products, specializing in isocyanates and vinyls. The company was acquired in 2006 by British investment house Permira.

Permira (www.permira.com)
London based Permira Advisers Ltd. was founded in 1985 and operates in Asia, Europe, and North America. As a private equity firm, Permia seeks opportunities for buy-outs and buy-ins, turnarounds, and private takeovers in a variety of sectors.