UK’s Devon Fund Makes Offer for Dina Petrokemija

In a potential transaction that looks tantamount to an acquisition, insolvent Croatian petrochemical producer Dina Petrokemija said it has received a "concrete offer" from UK-based Devon fund to take over its debts, increase its capital and "significantly" expand production.

Dina management board president Fabio Giacometti told a Croatian news agency that the offer was "serious." However, he declined to disclose further details other than the investor had sent a Kazakhstan-based technical crew to examine the company's production facilities.

To remain competitive, Giacometti said Dina needs a capital injection of around €25 million to pay for new plants to make additional petrochemical products. The company also needs credit to pay workers' outstanding salaries, he added.

With polyethylene production facilities on the Adriatic island of Krk, Dina belongs to the Dioki group of Zagreb, Croatia, which is also insolvent. The parent company filed for bankruptcy in October 2013, when its creditors refused to back a debt restructuring plan, and its share price collapsed.

In late 2012 Dioki idled several ethylene and downstream plants and laid off at upwards of 300 workers, according to reports.

In other news, the government of Croatia has filed a lawsuit against Hungarian oil and gas group MOL in the International Court of Arbitration in Geneva. The news agency Hina said it had received confirmation by the Croatian economics ministry.

It quoted "unofficial sources" as saying Croatia had asked the court to nullify the 2009 amended agreement on management rights in the Croatian oil and gas company INA and the main agreement on gas business. The agency said Croatia also was seeking compensation for the damage caused by these agreements were signed during the term of the government of Prime Minister Ivo Sanader.