Kazincbarcika, Hungary - Isocynates producer BorsodChem is continuing to make "good progress towards finalising the details of the debt restructuring plan,' the Hungarian group said 12 Sept.
The company's senior steering committee endorsed a proposal which over the previous weeks has been negotiated amongst all stakeholders, consisting of this committee, the Mezzanine Steering Committee, the Hungarian Development Bank, shareholders and BorsodChem.
BorsodChem said its management "is confident that the current proposal can be implemented and targets a final approval by all lenders in early October. Once implemented, the new financial structure will provide BorsodChem with significant further financial flexibility and a solid platform for growth."
BorsodChem also noted the statement from Wanhua Industrial Group on 9 Sept on the Chinese group's expression of interest in becoming a strategic investor in the company. BorsodChem confirmed that its shareholders have been approached by Wanhua, but said so far there have been no discussions between the groups. "The management's current priority is to focus on completing the debt restructuring based on the existing restructuring proposal as outlined above," the company stated.
Wanhua Group, whose Yantai Wanhua Polyurethanes Co. Ltd subsidiary is the largest isocyanate producer in the Asia-Pacific region, said 10 Sept that it was talking with BorsodChem's majority owner, private equity firm Permira, with a view to becoming a strategic investor in the Hungarian chemicals group.
A stake in the Hungarian producer of TDI (toluene diisocyanate) and MDI (methylene diphenyl diisocyanate) would give Wanhua its first manufacturing base in Europe, at the group's Kazincbarcika site in eastern Hungary.
BorsodChem is the middle of a major expansion project at this site: debottlenecking MDI production by about 30 percent, but may delay its planned second 200 kilotonnes-per-annum (ktpa) TDI plant, "until visibility on the future development of global TDI demand improves."
A 9 September statement from the Chinese firm said, "Wanhua believes that it could significantly contribute to BorsodChem's stability and long-term growth prospects via its operational and technological expertise as well as additional capital investment."