A Shanghai-listed company has acquired debt-laden
BorsodChem, a Hungarian chemicals company, in a landmark debt
restructuring and buyout deal. The advanced acquisition
strategy is unprecedented in China outbound transactions.
Wanhua Industrial Group initially approached the
seller, private equity house Permira, about buying BorsodChem
equity outright from existing shareholders. But it was rejected
by Permira, which opted for a closed group restructuring
The acquirer, a top producer of polyurethane materials, then
sought to use its internal resources to buy the
target’s freely traded mezzanine debt, which at
the time was experiencing a selloff by investment funds and
commercial banks that viewed a lack of progress in
restructuring as a sign of depreciating value in debt....