Arkema to book 125 mln euro charge for former unit

PARIS, April 10 Wed Apr 10, 2013 8:10am EDT

Related Topics

PARIS, April 10 (Reuters) - French chemicals maker Arkema will book a first-quarter charge of 125 million euros ($163 million) to reflect its exposure to unprofitable vinyls business Kem One, which it spun off in July 2012, Arkema said on Wednesday.

A French commercial court opened bankruptcy proceedings for Kem One in March at the request of its new owner, Klesch Group, led by American investor Gary Klesch.

A court-appointed administrator is due to oversee Kem One's operations as part of the initial six-month procedure. Arkema will contribute 68.7 million euros to Kem One's financing during the observation period, the company said.

Klesch Group is also suing Arkema for 310 million euros ($403 million) in a dispute over the sale of Kem One.

Klesch said it had discovered significant gaps in the information presented by Arkema's management before it completed the acquisition of Kem One, whose products are used in items ranging from pipes and packaging to paper.

Arkema has rejected what it called "serious and false allegations", saying it was confident of demonstrating they were "totally unfounded". ($1 = 0.7658 euros) (Reporting by Elena Berton; Editing by Tom Pfeiffer)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.