DyStar operations set to restart as Kiri Dyes secures financing

4 February 2010, Frankfurt – Administrators have announced that operations at DyStar Textilfarben GmbH and DyStar Textilfarben GmbH & Co. KG at the four German DyStar sites in Brunsbüttel, Leverkusen, Frankfurt am Main and Ludwigshafen are now set to restart under the new management of Kiri Dyes & Chemicals Ltd. (KDCL).

“The investor has secured financing of the purchase price and also met other conditions. The purchase agreement concerning operations of the German DyStar Group, the necessary assets and the 36 international subsidiaries has been executed,“ insolvency administrators Miguel Grosser from the law firm JAFFÉ Rechtsanwälte Insolvenzverwalter and Dr. Stephan Laubereau from PLUTA Rechtsanwalts GmbH confirmed today.

The administrators say that this leaves up to 750 jobs in Germany and some 2,000 jobs worldwide secure. The exact purchase price was not disclosed.

The investor, BSE-listed Indian manufacturer and supplier Kiri Dyes & Chemicals Ltd., says it plans to continue the sites in Frankfurt/Main, Leverkusen, Ludwigshafen and Brunsbüttel and resume production as quickly as possible. After the German DyStar Group filed for insolvency at the end of September, only the indigo production in Ludwigshafen continued without interruptions.

“Meanwhile, DyStar Textilfarben GmbH was also able to carry on full operations, the global supply of dyes, additives and services for the textile and leather processing industries, under the responsibility of insolvency administrator Miguel Grosser even after opening insolvency proceedings on 1 December 2009,” administrators said today, adding:

“Productions in Brunsbüttel, Geretsried and Leverkusen, on the other hand, needed to be halted at the end of November 2009, requiring staff involved to be laid off. Upon execution of the purchase agreement, the vast majority of the staff laid-off in total can now be reemployed at their old workplaces.”

“Along with the 90 jobs in Ludwigshafen, KDCL’s buyer concept also provides new jobs for around 130 employees in Brunsbüttel, some 260 in Frankfurt, including the 50 employees of DyStar Textilfarben GmbH in Frankfurt who previously performed central functions from purchasing to sales for the DyStar Group, and roughly 236 in Leverkusen.”

 “From where we stand, this is a major success to be able to save four production sites in Germany with so many jobs given the current difficult economic setting,“ the insolvency administrators underlined. “Looked at this way and from the point of view of the creditors, Kiri’s concept was without alternative. There was no other binding offer meeting the requirements and the necessary financing conditions.”

Administrators have confirmed that after an intensive worldwide search for investors, three potential buyers remained in the end with whom negotiations continued. In December 2009, the purchase agreement was finally signed with KDCL. Its execution, however, was conditional on the availability of financing, the necessary anti-trust approvals, and other conditions (consent of the banking consortium and other creditors). The banking consortium and the creditor committees had already given their consent. Now, KDCL has met the financing conditions and the relevant Cartel Authorities have given their approval.

"Synergies of both the companies, DyStar and KDCL, will provide long term sustainable and successful future to DyStar. Dystar and KDCL jointly have created competitive advantages with completion of this acquisition, which will strengthen global leadership of DyStar, and will create high values for all their stake holders such as investors, employees, creditors and vendors.

DyStar will continue to operate as an independent company in the market," said Manish Kiri, Managing Director of KDCL.

Founded in Ahmedabad in 1998, Kiri Dyes & Chemicals Ltd. is a manufacturer and supplier of dyes and intermediates, focussing primarily in the Asian and North American markets. The company says that the acquisition of the DyStar Group will provide KDCL access to new markets and customer groups, specifically in Europe.