Klesch sues Arkema over vinyl unit sale

MOSCOW (MRC) -- A Swiss investment group is suing specialist chemicals maker Arkema for 310 million euros (USD403 million), in a dispute over its purchase of the French company's loss-making vinyl division last year, Reuters.

Klesch Group, led by American investor Gary Klesch, said it had discovered significant gaps in the information presented by Arkema's management before it completed the acquisition in July of Kem One SAS, whose products are used in items ranging from pipes and packaging to paper.

"Had Klesch known of these misrepresentations at the time of negotiations it would not have entered into the transaction under the terms agreed," Klesch said in a statement on Monday.

Arkema rejected what it called "serious and false allegations", saying it was confident of demonstrating they were "totally unfounded".

Arkema said Klesch had access "in complete transparency and throughout the negotiations" to all the necessary information to assess the financial situation and prospects of the business.

The sale of the vinyls division led to a 505 million euro charge in Arkema's 2011 accounts as it refocused on products that are less sensitive to volatility in raw material prices and the economic cycle (see MRC news).

Formerly an adviser to President Gerald Ford and a bankruptcy consultant for the UK Treasury, Klesch built a reputation in London's financial sector in the 1980s and 90s as a defender of investor rights and was involved in high-profile corporate restructurings such as at Eurotunnel.

Klesch has lately switched his focus to commodity assets such as refineries, shipping firms and aluminium smelters.
MRC

MOSCOW (MRC) -- Rajoo Bausano, a joint venture between Rajkot-based Rajoo Engineers Limited and Italy's Bausano and Figli SPA, has developed a machine to manufacture 500 mm diameter PVC pipes, said Plastemart.

Company will export the fully automatic machine with output capacity of 1000 kg/hour to South Africa.

To produce advance technology pipe manufacturing machines company has joined hand with Italy based company 'Bausano' and form new company named Rajoo Bausano Extusion Pvt Ltd in 2010.

As MRC wrote earlier, Rajoo and Bausano formed Rajoo Bausano Extrusion Pvt. Ltd., and put operations to commence in 2011, supplying pipe and profile lines, including wood plastic composite technology, in India, Africa, and South Asia from Rajkot.

Rajoo Engineers Limited has 49 % share in the joint venture and Italian company has 51% share. Under this JV, Italian company provides technology and Rajoo Engineers produce the machine and market.
MRC

MOSCOW (MRC) -- The International Court of Arbitration of the International Chamber of Commerce has released the final award amount, representing interest and costs, in the arbitration case between Dow Chemical, the largest U.S. chemical maker by sales, and Petrochemical Industries Company of Kuwait (PIC) related to the K-Dow transaction, according to Dow's press release.

The final interest and costs awarded to Dow totals USD318 million, as of today, and is in addition to the partial award of USD2.16 billion announced last May - resulting in full damages awarded to Dow equal to USD2.48 billion.

This is the last step in the disciplined arbitration process, bringing the process to a close. Both awards (partial and final) are binding and non-appealable.

"Payment of these damages of nearly USD2.5 billion will allow Dow to accelerate its priority uses for cash by further strengthening our balance sheet," said Andrew N. Liveris, Dow’s chairman and chief executive officer. "Dow and Kuwait share a long history and strong partnership, and this award ruling brings suitable closure to the arbitration process. The Dow team fully expects, and we are resolved to ensure, that PIC honors its contractual commitments in a timely manner."

The total award amount is subject to continuing interest until Dow receives payment. Counsel for Dow is Shearman & Sterling.

As MRC reported earlier, Dow put together a USD17.4 billion joint venture with Petrochemical Industries Co. (PIC), a subsidiary of state-owned Kuwait Petroleum Corp., to produce plastics for consumer products, automotive parts, and drug processing in 2008. But as commodity prices plunged and the global economy went into a recession, the so-called K-Dow Petrochemicals joint venture was scrapped just days before it was set to close. Two months after the deal collapsed, Dow posted losses of USD1.55 billion for the fourth-quarter of 2008 and cut about 11 per cent of its global work force. The International Court of Arbitration in Paris ruled that PIC will pay Dow for backing out of the deal. The court is part of the International Chamber of Commerce.

The Dow Chemical Company is an American multinational chemical corporation headquartered in Midland, Michigan, United States. Dow is a large producer of plastics, including polystyrene (PS), polyurethane, polyethylene (PE), polypropylene (PP), and synthetic rubber.
MRC

MOSCOW (MRC) -- Saudi Basic Industries has announced that it will not go ahead with a previously announced plan to build a USD5.3bn petrochemicals complex in the Republic of Trinidad and Tobago, said Constructionweekonline.

The firm had announced in February last year that both it and its partner Chinese Petrochemicals Corporation (Sinopec) had entered into negotiations over the development of the facility which would convert methanol into olefins.

However, in an update on the project earlier today the company said that "the relevant parties did not reach a deal on the fundamental conditions for this project".

It added that it decided yesterday not to continue talks on the proposals. As MRC wrote earlier, Sabic signed a protocol of cooperation with Sinopec to explore new business opportunities in January 2012.

Sabic is 70 percent owned by the government of Saudi Arabia. Sabic is ranked among the world's largest petrochemicals manufacturers. It is the largest public company in Saudi Arabia. The comany manufactures chemicals and intermediates, industrial polymers, fertilizers and metals. It is currently the second largest global ethylene glycol producer. Among its products are propylene, paraxylene, styrene, vinyl chloride monomer.
MRC

MOSCOW (MRC) -- Mitsui Chemicals Inc. (MCI) has detailed its 1 Apr. 2013 organizational restructuring intended to support further acceleration of its portfolio transformation and implementation of safety directives, said Apic-online.

The plan involves restructuring of research and development, strengthening its safety management structure and restructuring of the Finance and Accounting Division.

The management functions of each research facility and staff functions of the research and development divisions will be incorporated into the Sodegaura Safety, Environment and Administration Division, and renamed the R&D Administration Division.

In light of the Iwakuni-Ohtake Works accident, the Safety & Environment Division, which had been under the head office's Production & Technology Center, will be separated and reestablished as a new Safety & Environment Division to clarify organizational structure signifying that "safety is a top priority."

As MRC wrote earlier, Mitsui Chemicals is considering investing in the US petrochemical business using cheap natural gas there as a feedstock. Low natural gas prices resulting from the US shale-gas boom are stimulating new investments iin petrochemical plants there.

To accelerate implementation of management support functions and specialized functions, the existing Finance and Accounting Division will be discontinued and reorganized as the Corporate Performance Division and the Finance and Accounting Division.
MRC