Investment in the distressed company would be linked to equity dilution of Slezynger family
04/24/2024
Asset manager IG4 has made a bid to take over Unigel, Valor has learned. The negotiations hinge on the willingness of the Slezynger family to relinquish control of the chemical company and accept equity dilution, sources indicate.
Talks began three months ago and have progressed in recent weeks, people familiar with the matter say.
With debts amounting to R$3.9 billion, the company finalized an agreement with creditors on the final details of an out-of-court reorganization plan ratified in February. It has until May 20 to secure the simple majority support of the creditors involved in the restructuring and ensure the plan’s execution.
According to a source, even if the agreement is concluded, Unigel’s restructuring merely postpones the company’s debt issues without addressing the core problem. A significant equity injection and relinquishment of control by the family would be necessary for a comprehensive restructuring of the group. IG4 is reportedly ready to participate in the business restructuring.
When approached, Unigel said that it is not negotiating the sale of the control. “The family has owned Unigel for about 60 years and has no intention of leaving the business,” the company said. IG4 declined to comment on the matter.
The family has enlisted the expertise of businessman Pedro Wongtschowski, a minority shareholder and former chairman of energy giant Ultrapar, to lead the company’s restructuring amid financial challenges.
Mr. Wongtschowski could advise the group from the board—a position he held at Unigel about a decade ago during a period of substantial debt due to expansion investments and acquisitions in Brazil and Mexico, as the company was navigating another severe financial crisis.
Mr. Wongtschowski’s role will be that of an adviser, though it is not yet clear if he will actually take a position on the company’s board. The businessman was also being considered for the CEO position, but consensus has not yet been reached. Mr. Wongtschowski’s entire career is linked to the Ultra group—he was a close aide to the late Paulo Cunha, the group’s leader for 25 years.
Henri Slezynger, the group’s founder, continues to lead the board of directors while one of his sons, Marc, serves as deputy chairman. Currently, two of the five board seats are vacant.
From January to September of last year, the company posted a net loss of R$1 billion. Net revenue totaled R$4.11 billion, a 45% decrease compared to the previous year, and the adjusted operating result (EBITDA) was negative at R$276 million, compared to a positive R$1.65 billion a year earlier. The company has yet to release its fourth-quarter financial statement, which was scheduled for early April.
*Por Taís Hirata, Mônica Scaramuzzo — São Paulo
Source: Valor International