Permira agrees on debt restructuring for BorsodChem

Permira has agreed on a deal with the Chinese company Wanhua Industrial over a restructuring of BorsodChem’s EUR 1.1 billion (USD 1.5 billion) debts. Under the plan, Permira and Vienna Capital Partners, the majority shareholders of the Hungarian chemicals company, along with Wanhua Industrial would underwrite a EUR 140 million injection of new funds.

Although the deal is not yet binding, the groups have agreed the key terms that would see Permira keeping majority control of BorsodChem, with Wanhua Industrial having a minority stake with an option to gain a majority stake in three years time.

The parties had already agreed on a restructuring plan in October 2009 but had to renegotiate after an offer of a EUR 100 million loan from the state-owned Hungarian Development Bank was withdrawn. Under the proposal the company’s senior creditors would be unaffected but its mezzanine debt, a majority of which is held by Wanhua Industrial, would be converted into equity.