BUDAPEST (Reuters) – China’s Wanhua Industrial Group will provide 140 million euros ($189 million) funding for Hungarian chemicals group BorsodChem and may gain full ownership within 24 months, BorsodChem said on Thursday.
Under a deal signed with BorsodChem’s owners, private equity fund Permira [PERM.UL] and Vienna Capital Partners (VCP), Wanhua will supply initial funding of 30 million euros.
Wanhua will give additional financing of 110 million euros after completion of the capital restructuring process, BorsodChem said.
“As soon as the restructuring deal is completed, Wanhua may exercise a call option to acquire Permira Fund’s/VCP’s entire stake in BorsodChem within the next 24 months,” BorsodChem said.
BorsodChem said the agreement with Wanhua and the funding was subject to approval by its creditors.
BorsodChem, one of the biggest employers in eastern Hungary with a total workforce of around 2,700, has been in talks to reach a deal on a restructuring of its debt with its creditors for the past year.
Wanhua is the largest isocyanate producer in Asia Pacific.
Permira has previously said it was not planning to sell BorsodChem for at least another 3-4 years and could not back Wanhua becoming a majority owner.
BorsodChem said in the statement released ahead of a press conference scheduled for 1030 GMT that it would use the new funding to complete the construction of its new production plants and “for general corporate purposes”. ($1=0.7421 euros) (Reporting by Krisztina Than; Editing by Dan Lalor, Mike Nesbit)