Monday, 27 July 2009

BorsodChem gets state bailout

Struggling Hungarian pvc-maker BorsodChem is being rescued by the country's government. I visited the company at its main site in Kazincbarcika in the east of the country, towards the border with Ukraine. This is a really depressed part of the country with high unemployment so it is no surprise the state is willing to step in. BorsodChem is one of the few major employers in the region.

View BorsodChem in Hungary in a larger map

According to the Financial Times, the Hungarian government is throwing a lifeline to one of eastern Europe’s biggest private-equity deals by offering a €100m ($142m) loan to Borsodchem, the chemicals group acquired by UK buy-out house Permira for €1.6bn in 2006.

The loan from the state-owned Hungarian Development Bank is conditional on Permira reaching an agreement with Borsodchem’s lenders to restructure its excessive debt in a way that is acceptable to Budapest.

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