Sibur Presses Ahead With Plan To Acquire Control of Amtel

Petrochemicals firm Sibur will proceed with its plan to acquire control of Russian-Dutch tire maker Amtel-Vredestein and plans to issue bonds as part of the deal, an executive said Friday.

Sibur-Russian Tires, the largest tire maker in Eastern Europe and a unit of Sibur, had been in merger talks with indebted Amtel-Vredestein last year before negotiations broke off in September, derailed by the global financial crisis.

Igor Karavayev, deputy general director of Sibur-Russian Tires, said his company planned to issue bonds within the next two weeks that could be converted into shares in Sibur-Russian.

"They will be one of the instruments used in carrying out the deal with Amtel-Vredestein," Karavayev said. "We are continuing negotiations and have no intention of pulling out," he said.

The merged company could boast annual sales of around $2 billion. The deal discussed last year was designed to allow Sibur-Russian Tires to gain control of a 60.5 percent stake in Amtel. Karavayev declined to specify the size of the stake.

Vedomosti reported Friday that Sibur planned to buy up $600 million of Amtel-Vredestein's debt. Karavayev also declined to reveal the size of the planned bond issue while negotiations with banks continued.

"We think we are acting in the interests of both companies. There are no obvious contradictions hindering the deal with Amtel," he said.

Amtel, which has encountered debt-refinancing problems, said in December that its Russian business was no longer able to satisfy creditors' demands and that it was looking to sell the Dutch side of its business.

Sibur, controlled by Gazprombank, had no major debts before the crisis and has said it will make a profit this year as long as oil prices stay above $30 per barrel.