Belgium“s Solvay SA chemical producer was expected last week to transfer the second tranche of US$ 30 million out of a total of US$ 160 million it is paying for 60% of Bulgaria“s soda ash producer S…
Belgium“s Solvay SA chemical producer was expected last week to transfer the second tranche of US$ 30 million out of a total of US$ 160 million it is paying for 60% of Bulgaria“s soda ash producer Sodi Devnya, Bulgaria“s Privatisation Agency has said. A further US$ 90 million is to be paid when the shares are transferred to the new owner towards the end of February 1997. The remaining US$ 10 million will be handed over in March 1997, on condition that the plant has achieved a 20% return on investment, according to Bulgarian Deputy Prime Minister Rumen Gechev. US producer General Chemical had been understood to be close to agreement on buying the plant, but pulled out. The agreement with Solvay is subject to approval by several governments and to a due diligence review by Solvay. A deadline of 28 February 1997 has been set for a final agreement. Solvay is hoping to involve the European Bank for Reconstruction and Development in Sodi, as well as other financial partners and possibly other companies. Sodi had 1995 sales of US$ 99 million, 75% of which came from exports, and operates the largest synthetic soda ash plant in the world. It has a total soda ash capacity of 1.2 million tons/year, including 400,000 tons/year of dense soda ash, and there are plans for dense capacity expansion. It also produces sodium bicarbonate, caustic soda, borax and chlorine. Solvay will maintain the 2,150 jobs in the plant over the next two years and in 1999 and 2000 it will have the right to cut 150 jobs per year. The quarries with the Sodi Works will remain the property of the state while Solvay is also to sign a contract with state-owned companies for the delivery of limestone, salt, steam and electricity, Mr. Gechev said. Official figures show that Sodi of Devnya ranks first in Europe and second in the world in terms of production capacities. The company also has installations for baking and calcium chloride. Sodi exports to Europe, Asia, Africa, northern and southern America and sells the entire remaining amount on the home market. Solvay has indicated that one key objective behind the acquisition was access to Eastern European, Middle East and Central Asian soda ash markets, raising the prospect that the company may reduce Sodi“s exports into Western Europe.