Spun-off Arkema unit begins bankruptcy proceedings
LYON, March 27
LYON, March 27 (Reuters) - A French commercial court on Wednesday opened bankruptcy proceedings for unprofitable chemicals-maker Kem One, which was spun off from France's Arkema in July and which employs 1,300 people, the court said.
Kem One owner Gary Klesch, who submitted the insolvency request, said the vinyl specialist's management team was determined to keep the business afloat with help from Arkema, chief supplier Total and the French government.
France is suffering from a grim economic climate that has crimped consumer spending, stalled growth and pushed the jobless rate to a 13-year high. National champions like automaker PSA Peugeot Citroen and drugmaker Sanofi are cutting thousands of jobs.
A court-appointed administrator is due to oversee Kem One's operations as part of the initial six-month procedure.
French Industry Minister Arnaud Montebourg, who has publicly attacked companies like Arcelor Mittal and Peugeot over job-cut plans, told parliament the government would work with other members of the chemicals industry to find a solution.
The bankruptcy procedure is also expected to reveal details of last year's sale of Kem One to Klesch, a deal that went sour after Klesch accused Arkema of supplying "false information" and filed a lawsuit against the chemicals company to claim damages.
Arkema's position is that Klesch went back on promises to develop a financing plan after the company contributed 100 million euros in cash to get the unit off its hands. It also accuses Klesch of aggravating Kem One's losses by spinning off its downstream operations, known as Innovative Vinyls.
"The situation created today results from a unilateral act by the Klesch Group ... (Arkema) expects that these insolvency proceedings will help clarify the reasons for the current situation," the company said.
Klesch Group said it had confidence in Arkema's "commitment" to help find sustainable solutions for Kem One's activities.
(Reporting by Catherine Lagrange; Writing by Lionel Laurent; Editing by Jason Webb)
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