Nynas enters restructuring process
Nynas AB (publ) filed for “company reorganisation” in Sweden at Södertörn’s District Court today (Monday 16 December 2019). According to a company statement, Nynas’s banks have refused to continue to extend loans to the company and therefore “Nynas cannot pay due debts forcing the company to apply for a reorganisation”.
“Despite loyal customers and dedicated work by our employees, we have not been able to avoid the situation that has arisen,” said Bo Askvik, acting CEO of Nynas AB (publ) (“Nynas”). “Because the business is of great importance to our customers, and it is my absolute hope that the company can be reorganised under controlled forms so that we can continue to deliver our products.”
“In the short term, we see no other opportunity than to request a reorganisation, in the long term, we see good conditions to continue the business. Nynas has a strong offering with good demand from the market,” says Bo Askvik.
US sanctions are said to be at the root of Nynas’ difficulties. According to the company, the US sanctions against Nynas’ 50 per cent shareholder, Venezuelan PDVSA, have eroded Nynas profitability over time. Due to PDVSA’s ownership, Nynas has been affected by US financial restrictions since August 2017. Recently, the company has also been stopped from buying crude oil from Venezuela which has been replaced with other crude oils. This has resulted in increased raw material costs. As a result of the sanctions, the company had high financial prices and lost business because of the sanctions. Now, a situation has arisen where there is no longer a continuous financing of the company’s operations.
This has put Nynas in a difficult situation and with the shareholders’ support, a plan has been drawn up with the objective to get Nynas completely out of the sanctions in early 2020. A strategic three-year plan to achieve better profitability has also been developed and Nynas is also implementing changes in the raw material mix to the refineries.
The banks that have been financing the business for a long period have chosen, in their current form, not to support the company’s change work. As a result, Nynas has no option but to request a company reorganisation.
Mikael Kubu, Ackordscentralen and Lars Eric Gustafsson, Hamilton Advokatbyrå, have been appointed as Administrators in Nynas AB (publ) by the district court.