- Compelling restructuring plan to deliver significant advantages to stakeholders
- Opportunity to leverage synergies between SouthernPec Corporation and ListCo
- Raising asset productivity and enhancing business to assist ListCo's rapid return to profitability and long term growth
GUANGZHOU, China and HONG KONG, Aug. 27, 2012 /PRNewswire-Asia/ -- Saturn Petrochemical Holdings Limited ("SPHL"), an affiliate of Warburg Pincus LLC ("Warburg Pincus"), and SouthernPec Corporation ("SP") today announced that a joint venture company ( "Joint Venture Co") has been formed for the purposes of submitting a detailed proposal ("Proposal") to restructure Titan Petrochemicals Group Limited (SEHK: 1192, "ListCo") to court appointed restructuring professionals.
ListCo is currently insolvent, and has experienced three failed debt restructurings in the past three years, with aggregate net losses of over USD452 million in the past five years.
The Proposal includes (as set out in more detail below) the Joint Venture Co subscribing for new equity in ListCo, injection of capital, a comprehensive restructuring of ListCo's debts, and a tender offer to existing creditors for an immediate cash return in respect of a proportion of their respective claims. It provides ListCo the ability to implement a genuine restructuring on an expedited basis under the supervision of the court, and gives ListCo the opportunity to continue as a going concern with a substantially reduced debt burden, thereby preserving value for all stakeholders, including creditors, shareholders and employees alike.
The Proposal is to be considered, along with all other available alternative proposals and options, by licensed restructuring professionals who are expected to be appointed as joint provisional liquidators ("JPLs") of ListCo by the Bermuda Court on September 5, 2012, pursuant to a petition and a summons filed by SPHL on July 5, 2012 and August 24, 2012 respectively. The authority of the Board to act on behalf of ListCo will be immediately revoked on the appointment of the JPLs.
The expected appointment of the JPLs over ListCo on September 5, 2012 follows steps successfully taken by Saturn Storage Limited (another Warburg Pincus affiliate) on July 16, 2012 to have liquidators appointed over ListCo's main subsidiary, Titan Group Investment Limited ("TGIL"), again in order to effect the implementation of a viable restructuring.
Mr. Xiao Liangping, Chairman and President of SP, a market leader in trading, large-scale storage and shipping logistics of oil products and chemicals, said: "We are delighted that Warburg Pincus has invited us to join forces in the proposed restructuring of ListCo. We believe significant synergies exist between SP's current businesses and those of ListCo. Through injection of capital, potential injection of assets, deployment of an experienced management team and the development of a blueprint for growth, the joint venture will provide necessary operational and financial support to rescue ListCo from financial insolvency, help return ListCo to profitability and to build its long term potential."
Dr. Bo Bai, Executive Director from Warburg Pincus, commented: "The joint venture Proposal delivers superior returns when compared to the alternative being offered by ListCo. By partnering with SouthernPec Corporation, we will offer ListCo the opportunity to turn its declining business into a successful enterprise with a profitable future and bright prospects for accelerated growth. However, this opportunity can only be achieved with the appointment of independent, third parties with specialized restructuring expertise who would manage ListCo in the best interests of shareholders, bondholders, creditors and other stakeholders, pending the implementation of the restructuring plan. "
Highlights of the Proposal:
The Proposal demonstrates distinctive advantages over the ListCo's other proposal:
About SouthernPec Corporation
SP, established in 2002, is an integrated company in the energy and petrochemical industry with business covering trade, logistics, manufacturing and project investment. In 2010 and 2011, SP was listed in China Top 500 Enterprises.
SP's storage and logistics business is a comprehensive logistics industrial chain covering storage terminals, land and sea transportation, pipeline transfer and marine fuel supply. The storage business, based on storage functions as the core foundation, extends to bonded warehouse storage, delivery warehouse services, supervised warehouse services, simple oil blending and other value-added services. Since its inception, SP has transformed into an international energy enterprise with operations in China, Asia, Europe, the United States, and Africa.
SPHL is an affiliate of Warburg Pincus. SPHL has invested in ListCo since 2007 and holds a preferred equity stake of 555,000,000 shares with a par value of USD40 million in ListCo.
About Warburg Pincus
Warburg Pincus is a leading global private equity firm focused on growth investing. The firm has more than US$30 billion in assets under management. Its active portfolio of more than 125 companies is highly diversified by stage, sector and geography. Warburg Pincus is an experienced partner to management teams seeking to build durable companies with sustainable value. Founded in 1966, Warburg Pincus has raised 13 private equity funds which have invested more than US$40 billion in over 650 companies in more than 30 countries.
Since inception, the firm has provided over $6 billion of equity for companies around the world involved in oil and gas exploration and production, midstream, power generation, oilfield technology and related-services, and alternative energy development. Warburg Pincus has been the lead investor in several dozen energy companies including: Antero Resources, Asian American Gas, Bill Barrett Corporation, Canbriam Energy, ElectroMagnetic GeoServices, Fairfield Energy, IMC Limited, Kosmos Energy, MEG Energy, Newfield Exploration, Spinnaker Exploration and Targa Resources.
Since the firm's first investment in China in 1994, Warburg Pincus has invested in more than US $3 billion in companies including 7 Days Inn, AsiaInfo, Guangzhou R&F Properties, Harbin Pharmaceutical, Intime, Lepu Medical, RDA Microelectronics and China Red Star Macalline.
The firm is headquartered in New York with offices in Amsterdam, Beijing, Frankfurt, Hong Kong, London, Luxembourg, Mauritius, Mumbai, San Francisco, Sao Paulo and Shanghai. For more information, please visit www.warburgpincus.com.
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