Hungarian chemicals company BorsodChem (Kazincbarcika; www.borsodchem.hu) could well be Chinese-owned in two years’ time. After months of wrangling, current majority shareholders – private equity investor Permira (Frankfurt / Germany; www.permira.com) and Vienna Capital Partners (VCP, Vienna / Austria; www.vcpag.com) – have decided to give minority shareholder Yantai Wanhua Polyurethane (Yantai, Shandong / China; www.ytpu.com) an option to acquire all shares currently held by Permira and VCP – see Plasteurope.com of 15.02.2010.

In exchange Wanhua will extend an immediate loan of EUR 30m, followed by an additional EUR 110m within a few weeks. “The money will allow us to complete construction of the new TDI plant as soon as possible,” explained BorsodChem CEO Wolfgang Büchele. The companies have not provided any further financial details of the deal.

With debt of nearly EUR 1.1 bn BorsodChem urgently needs Wanhua’s financial injection, although even then the expected improvement will only be marginal. The EUR 140m loan can be offset against the estimated EUR 150m in mezzanine credit acquired by Wanhua, which has since been converted into shares. Therefore, the latest deal does not affect the company’s overall debt and debt servicing or for that matter its credit standing.

Wanhua’s next move is unclear. Jason Ding, CEO of parent company Wanhua Industrial Group, views BorsodChem as a bridgehead to other activities in Europe. “We will be expanding the business with the present management and making further investments,” he announced in Budapest. Wanhua evidently wants to retain VCP as a consultant once it gains control of BorsodChem and possibly take it back on board as a (minority) shareholder.