By Liz White, UT editor
Kazincbarcika, Hungary - Kikkolux Sarl has completed due diligence in connection with the Luxembourg-based equity group's potential takeover bid for BorsodChem Nyrt, and intends to go forward with its bid for ownership of the expanding Hungarian isocyanates producer.
BorsodChem issued a statement 4 Sept to investors and other participants in the capital markets explaining that Kikkolux, part of major equity grouping Permira Funds, has finished the investigation of BorsodChem's business/commercial, accounting & tax, legal & insurance, technical & environmental aspects needed to comply with due diligence.
"On the basis of the positive findings of the due diligence, Kikkolux maintains its intention to make a public purchase offer for the ordinary shares of the company on the terms announced earlier subject to the completion of the financing necessary for the public purchase offer," the statement concluded.
Kikkolux made a bid for the company 6 July, having entered into option agreements with key BorsodChem shareholders controlling about 39 million shares representing about 52 percent of its registered ordinary shares. Subject to satisfactory due diligence, Kikkolux said it would offer a share price of HuF 3000 to all BorsodChem shareholders.
BorsodChem announced a $630-million investment programme in April to expand production of the key polyurethane raw materials MDI (methylene diphenyl diisocyanate) and TDI (toluene diisocyanate).
And BorsodChem's chief executive officer Kay Gugler confirmed 10 August that Kikkolux fully supports this expansion strategy: "it was one of the reasons for their interest," he commented in a conference call.
The strategy involves expansion of MDI capacity to 360 kilotonnes per annum (ktpa) from 140 ktpa by 2012 and of TDI capacity to 260 ktpa from 80 ktpa currently.
Pic: part of BorsodChem's isocyanates plant by night