Private equity giant TPG threatens a lawsuit agains Italy’s chemical group Mossi Ghisolfi, while M&G obtained yesterday a first tranche of 34 million dollars out of a total of 100 millions of debtor-in-possession financing in the framework of Chapter 11 procedure the group had asked for all its subsidiaries active in the US (see here a prevoius post by BeBeez). DIP financing is being issued by an affiliate of mexican Banco Inbursa, controlled by Carlos Slim.
Mossi Ghisolfi crisi was a consequence of high cost overruns in the construction of the biggest PET/PTA plant in the world based in Corpus Christi (Texas) as many more investments than expected were needed so that M&G’s consolidated net financial debt skyrocketed to 1.8 billion euros at the end of 2016 from 1.2 billions at the end of 2015, after having seen refenues dropping to 1.7 billions and ebitda down to 83.4 millions.
For that reason Kirkland & Ellis, legal representative of investment veichle Magnate sarl raised concerns that the debtors have not been entirely forthcoming about the cost overruns at the Corpus Christi plant and that the debtors provided “a slightly whitewashed version” of the events that led to the bankruptcy. The lawfirm said that Magnate sarl is a non-debtor affiliates of M&G and the largest unsecured creditor in the case so his client will likely be seeking answers as the debtors’ prospective sale process moves forward (see here the docket release).
As far as BeBeez is concerned, Magnate sarl is an investment veichle which is controlled by US private equity firm TPG, who has been in business with Mossi Ghisolfi for some years. In November 2014 TPG (through its TPG Opportunities Partners platform) subscribed a 300 million dollars capital increase capitale for a 30% stake in M&G Chemicals (see here a previous post by BeBeez). In November 2014 TPG, through TPG Magnate Holdings which in turn was controlled by TOP III (TPG Opportunities Partners III) founded Magnate sarl (see here the constitution document).
In October 2011, TPG Capital and TPG Biotech funds, together with M&G Chemtex (a subsidiary of M&G group), had invested 250 million dollars to build the joint venture Beta Renewables (Chemtex had a 75% stake).
In the US M&G is advised by Rotschild, Allen&Overy and Jones Day while in Italy the group is supported by Mediobanca, Gianni Origoni Grippo Cappelli & Partners and fiscal specialist Stefania Chiaruttini. As for the industrial restructuring issues the group has mandated Alvarez& Marsal.