Coverage of high-potential mid-market firms in Poland


Ciech chemicals dividend payment could lead to covenants breach, end of deal with KI Chemistry

TAG'S: CIECH, Chemicals Industry

Listed chemicals firm Ciech could breach covenants and would effectively put an end to prospects of cooperation with KI Chemistry, if it decided to pay a dividend, Ciech management said in a justification to its recommendation of retaining 2013 profits.


Additionally, a dividend payment could endanger firm`s investment projects and render early debt repayment impossible, the management noted.


The justification comes on the heels of supervisory decision refusing to endorse the management`s proposal on retaining the 2013 net profit.


Ciech management proposed on March 21 retaining the firm`s net profit. In 2013, the company netted PLN 100.7 mln, according to the filing.


Ciech is currently the subject of a tender offer from KI Chemistry, a unit of Kulczyk Investments. KI chemistry is bidding on 66% of the firm at PLN 29.5 per share. Poland`s State Treasury, which holds a 38.7% stake in Ciech, has not yet announced its decision regarding the tender offer.


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