PKA doubles stake in troubled tyre recycler as part of rescue deal

first_imgDenmark’s PKA has taken a loss reported to be DKK830m (€111m) on its private equity investment in tyre recycling business Genan, and upped its stake to 97% from 45%, as part of a deal to save the ailing  company.PKA had an investment of DKK1bn (€134m) in Genan, but serious financial problems at the company came to light in early summer.Asked about Danish media reports that it was taking a loss on the investment of more than DKK800m, a PKA spokesman did not comment directly on the figure mentioned, but said: ”The loss has already been accounted for in our books by the end of Q2, and despite this we still have a positive return of approximately DKK10.7bn.”The labour-market pensions administrator said it was taking over all shares owned by Genan’s major shareholder and company founder Bent Nielsen. Managing director Peter Damgaard Jensen said: “This matter has taken so much effort over many months, and it has been a hard process, which we at PKA could have done without.”PKA was not used to being involved in cases such as this, he said.“Now there is a solution that we and the banks are happy with and what matters is to calm the situation and clarify how best we can move the business forward,” he said.Damgaard Jensen said PKA still believed in the business idea behind Genan.The company’s business is seen as environmentally beneficial, recycling tyres — rather than allowing them to be burned — into a variety of materials including infill in artificial turf sports surfaces.Genan said the company and new management would now work with the banks to prepare solutions to safeguard its future, and carry out a financial restructuring.It held a general meeting yesterday to approve the annual accounts of the Danish companies, PKA said.When Genan’s problems became clear, PKA requested in-depth research and analysis of the company, the PKA spokesman said.Genan said the purchase price for the shares PKA was buying would depend on the future development of the value of the Genan companies in question. PKA manages around DKK200bn (€26.8bn) on behalf of five labour-market pension funds, in the health and social care sectors.last_img read more

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