Hungary’s chemicals producer BorsodChem should not expect to receive the awaited EUR 100 million loan from the Hungarian Development Bank (MFB) any time soon, although it badly needs the capital to restructure its debts and ensure its operations, local daily Népszabadság reported on Friday. The issue is not even on the table at the bank, it added.
The BorsodChem project officially does not exist at state-owned MFB, simply because the company has not put in an official request. There is nothing to talk about, Népszabadság learned.
Previously, there were talks with the Kazincbarzika-based company, but there were "not overly serious" therefore BorsodChem’s pending loan is in a "very initial phase", the paper said.
The bank remains open to negotiations and an agreement with BorsodChem if the company is to submit an official request.
The paper contacted BC, but no officials were willing to comment.
BorsocChem’s current owners, Permira and VCP detailed at a press conference last year how, in their view, the company’s reorganisation should be carried out:
- the Hungarian Development Bank (MFB) would grant a EUR 100 million loan to BC. (The parties did not disclose how large spread above EURIBOR the loan would carry, Wolfgang Büchele, CEO of BorsodChem, said the interest would be market based and repayment would take place before the clearing of funds extended by the main lenders);
- the main creditors agreed to require only 25% of the interest repayment in cash for two years;
- those who granted the mezzanine loan will convert the loan to capital stock in full;
- Permira and VCP will inject further EUR 80 m capital into BC.
At first, the problem with all this was that China’s Yantai Wanhua Polyurethanes, controlling 75% of the mezzanine loan, declared it was opposing this proposal, as it wanted to acquire BorsodChem and see its current owners withdraw completely. 2009.09.29 16:38
Wanhua engages in war of words with Hungary´s BorsodChem, wants Permira to exit 2009.09.29 12:24
Yantai Wanhua remains a pain for Hungary´s BorsodChem - CEO
Later a regrettably ambiguous statement indicated that MFB would also back out from behind BorsodChem: 2009.10.02 10:01
Hungary not to help out troubled BorsodChem with loan (3)
Then BorsodChemnek managed to come to terms with its creditors, the Chinese among them, and its situation appeared to be settled or on its way to a final conclusion. 2009.10.15 11:19
China´s Wanhua retreats, surrenders goal to have Permira exit from Hungary´s BorsodChem
The statements made over the past few weeks, however, make it very clear that the tug of war around BorsodChem is not over yet: the MFB is reluctant to grant BC the EUR 100 m loan it had reportedly pledged to provide earlier.