Wanhua acquires full control of BorsodChem

Budapest, 1 February 2011 – Hungarian isocyanate producer BorsodChem Zrt. announces that Wanhua Industrial Group (Wanhua), a strategic investor, has today acquired full control over BorsodChem by exercising a call option which it was granted as part of BorsodChem’s financial restructuring in June 2010. Wanhua acquired all the shares held by Funds advised by Permira (Permira) and Vienna Capital Partners (VCP), the company’s previous majority owners.

The acquisition by Wanhua enables the further growth of BorsodChem and secures jobs at the company. As part of the restructuring last year, Wanhua provided BorsodChem with new funds of EUR 140 million (approximately HUF 39 billion), which the company currently uses to complete the construction of the new TDI-2 (toulene di-isocyanate) plant and the new Nitric Acid plant. The long-term development of BorsodChem is now secured by Wanhua, which is financially backed by a syndicate led by the Bank of China.

“The integration of BorsodChem into the Wanhua Group creates the third largest isocyanate producer in the world by turning both companies from two regional players into one global company. I am convinced of the future benefits of our partnership sharing industry know-how and driving genuine synergies.” – Jason Ding, Chief Executive Officer of Wanhua Industrial Group says. “Wanhua will leverage BorsodChem on its path towards globalization. Within the Wanhua Group, BorsodChem will be responsible for Wanhua’s European operation. We aim to expand BorsodChem and make it the most competitive isocyanate producer in Europe. ” – adds Mr Ding.

“Wanhua has acquired a successfully re-engineered company with efficient production technologies and committed employees. The strategic cooperation with Wanhua will make BorsodChem an even stronger partner to the European customer base of the Group.  In addition, it creates an access for BorsodChem to the Asian markets. With these excellent future perspectives BorsodChem will remain one of the largest employers in Hungary.” – says Wolfgang B├╝chele, Chairman and CEO of BorsodChem.

Funds advised by Permira, Permira and VCP as former majority shareholders are glad to have concluded this transaction with Wanhua, while VCP continues to support Wanhua as a partner.

“By developing a world-class management team with crisis and restructuring experience and implementing a successful re-engineering programme, Permira has achieved that now BorsodChem is a lot stronger and much more competitive than four years ago. We are convinced that the new owner will continue along the growth strategy that Permira and VCP initiated.“ – says Christian Neuss, Partner at Permira.

 “This transaction is highly significant for Central Europe and will pave the way for further investments by Chinese companies in the region. Having been invested in and committed to BorsodChem for more than a decade, we would be pleased if we could continue to be involved in the company under Wanhua’s stewardship” – says Heinrich Pecina, Senior Partner of VCP.


About BorsodChem
BorsodChem is an important European chemicals producer with two main product groups: polyurethane raw materials (MDI, TDI) and vinyls (PVC resins and caustic soda). It sells more than half of its output on Western European markets. A significant amount of its production is sold to cus                                                                                                                                                                            tomers in Central and Eastern Europe. BorsodChem is establishing an increasingly relevant position outside Europe. More information: http://www.borsodchem-group.com/

(Methyl di-phenylene isocyanate (MDI) is mainly used in polyurethane foams. Rigid foams are mostly used in construction, refrigeration, packaging and insulation. MDI is also used to make binders, elastomers, adhesives, sealants and coatings. Toluene diisocyanate (TDI) is used in the manufacture of polyurethane flexible foams for upholstery, mattresses and automotive seats. Smaller uses for TDI include polyurethane elastomers and coatings.)

About Wanhua Industrial Group
Wanhua is the largest isocyanate producer in the Asia Pacific region. Wanhua is a global technology leader in the industry with the world's largest and most integrated isocynate manufacturing complex coming into production in 2010. Wanhua sells its products into 40 countries across North America, Western and Eastern Europe, Japan, the Middle East and South East Asia. For more information, please visit the website at www.wanhuagroup.com

About Permira
Permira is a European private equity firm with a global reach. The firm advises funds with a total committed capital of approximately €20 billion (US$28 billion). Permira’s funds, raised from pension funds and other institutions, make long-term investments in companies with the ambition of transforming their performance and driving sustainable growth. Permira is wholly independent and owned by its Partners. The firm's teams are based in Frankfurt, Guernsey, Hong Kong, London, Luxembourg, Madrid, Menlo Park, Milan, New York, Paris, Stockholm and Tokyo. They specialise in five key sectors of activity: Consumer, Financial Services, Healthcare, Industrials and TMT. The Permira Funds have made over 190 private equity investments since 1985 and have returned €16 billion to their investors over the past decade. For more information visit:  www.permira.com

About VCP
VCP is a leading independent investment company and financial advisor in Converging Europe. VCP focuses on corporate finance and selective direct investments in companies with high potential for growth. With offices located in Vienna, Zagreb, and Warsaw, strengthened by a comprehensive network of cooperation partners, VCP possess the critical local presence, knowledge and cross-cultural understanding, essential to execute transactions in a goal-oriented, time efficient and thorough manner. For more information visit: www.vcpag.com