Sinochem, the Chinese petrochemical company that owns machinery company KraussMaffei, has taken the next step in its ongoing internal debt-to-equity conversion process that it previously announced in August.
According to a Dec. 13 statement, the company is currently converting existing shareholder loans into equity for China National Chemical Equipment (Luxembourg) S.á.r.l. (CNCE Lux), the parent company of KraussMaffei Group.
CNCE Lux is a wholly-owned subsidiary of KraussMaffei Co. Ltd. (KMCL), a company listed on the Shanghai Stock Exchange in China. But once the debt-to-equity conversion deal has been completed, CNCE Lux will be 90,76 percent owned by CNCE Group (Hong Kong) Co., Ltd.m also a Sinochem Company. This means the KraussMaffei Group will no longer be a majority owned part of a listed company.
The transaction involves some 478 million euros ($502.17 million) and is expected to significantly improve the KraussMaffei Group's capital structure and financial performance. It will reduce the company's mandatory financial reporting and administrative workload, freeing up resources that can now be allocated to its core business, the companies noted.
KraussMaffei is a global machinery supplier with its headquarters in Parsdorf, Germany.
KMCL will continue to be listed on the Shanghai Stock Exchange but will hold less than 10 percent of the shares in CNCE Lux/KraussMaffei Group.
The transaction should significantly improve KraussMaffei Group's capital structure and financial performance, the company said in a news release. This will not only open up new investment opportunities for the group but also position the company more securely for the future — a future that, according to a KM spokesperson, as it now stands will be focused on the Americas, China, and Asia, it said.
KMCL’s announcement on the Shanghai Stock Exchange complies with Chinese Stock Exchange regulations and marks the beginning of the final phase of the planned transaction. All parties are currently working to complete the process in a timely manner and are confident that the transaction will be successfully finalized.