BorsodChem private equity owners get lender support

BUDAPEST Fri Oct 9, 2009 4:59am EDT

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BUDAPEST Oct 9 (Reuters) - Hungarian chemicals firm BorsodChem [BDCD.UL] said its lenders want private equity owners Permira [PERM.UL] and Vienna Capital Partners to keep a majority stake in the company, potentially scuppering rival plans by China's Wanhua Industrial Group.

BorsodChem, which is in the middle of a debt restructuring, added that chemicals firm Wanhua may become a minority equity holder but any cooperation should be discussed only later and must be based on contractual agreements typical in the industry.

"In a meeting with senior lenders ... the Senior Steering Committee of the senior syndicate expressed its strong support of the current management of BorsodChem and its expectations that the current management continues to operate BorsodChem after the implementation of the debt restructuring plan," the firm said.

"Permira Funds and Vienna Capital Partners should remain majority shareholders, as was made clear by the banks," BorsodChem said.

The lenders' support for British fund Permira could thwart plans by Wanhua, the largest isocyanate producer in Asia Pacific, to become a long-term strategic investor and push out Permira, BorsodChem's biggest owner. [ID:nL1486992]

Permira has said it is not planning to sell BorsodChem for at least another 3-4 years and could not back Wanhua becoming a majority owner.

However, Wanhua, according to press reports, has bought up most of BorsodChem's mezzanine, or junior, debt, which has subordinated claims over the company's assets.

Once the firm comes to a deal with creditors, it must also agree with mezzanine creditors about a restructuring and a delay in this process could put the firm, one of the largest employers in eastern Hungary, in a difficult position. (Reporting by Balazs Koranyi; editing by Simon Jessop)

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