Azoty chemicals wants to find new owner for polyolefin segment

Poland's largest energy concern Orlen's offer for the acquisition of the Azoty Polyolefins group is valid until the end of 2025 and, in the opinion of the management board, it is realistic to expect that the negotiation process with stakeholders will be completed by that time.

"The terms of the purchase offer (for Grupa Azoty Polyolefins – MI) are based on a no cash no debt principle (...). For us, the most crucial element is how to conduct negotiations with all stakeholders (...) which should be completed within two months. (...) The strategy addresses the issue of polyolefins, among other things," deputy CEO Andrzej Dawidowski told a conference.

"We do not want to say today that everything will be 100 percent successful. All our activities are focused on polyolefins (...), and we believe that this is realistic. Two months is not a long period, so we will provide more information in our announcements closer to that date," he added.

In mid-October, Orlen made a non-binding offer to Grupa Azoty to purchase all shares in Grupa Azoty Polyolefins (GAP). The total value of the offer is PLN 1.022 billion (EUR 240.5 mln). The offer involves the acquisition of all shares in Grupa Azoty Polyolefins, including the assets of GAP, free of all encumbrances on a cash-free, debt-free basis.

The offer involves Orlen providing Grupa Azoty Polyolefins with the financing necessary to restructure all debts and claims and to purchase all GAP shares from the remaining shareholders.

The offer submitted by Orlen is valid until December 31, 2025, and the transaction is expected to be finalised by June 30, 2026.

The current shareholding structure of GA Polyolefins is as follows: Grupa Azoty Police – 34.4 percent, Grupa Azoty – 30.5 percent, Orlen – 17.3 percent, Hyundai Engineering Co. – 16.6 percent, Korea Overseas Infrastructure and Urban Development Support Corporation – 1.1 percent.

"Grupa Azoty made the decision to build a polyolefin complex in 2016 (...) and then the project was changed from a small project (...) to a huge chemical complex," Dawidowski said.

"Ambitions dominated this project, it was scaled up beyond the group's capabilities, but it strongly entered the business and competences of a much larger player on the European and Polish markets," he added.

As stated, the group's strategy is to exit the polypropylene business, find a suitable owner for this business who could further develop it and support synergies between the company's plants.

"For us, the most important thing is that the new owner who appears in this area continues this activity, develops the company and cooperates with us," Dawidowski added.

doa/ han/ nl/