The Abu Dhabi Government has begun to profit from its purchase of a troubled Canadian chemicals maker after losses amounting to hundreds of millions of dollars. Nova Chemicals, which the government-owned International Petroleum Investment Company (IPIC) bought outright last year for US$2.3 billion (Dh8.44bn), recorded net income of $17 million in the fourth quarter of last year. The company lost $212m in the same period in 2008. Despite the fourth-quarter profit, Nova lost a total of $241m for all of last year, the company said yesterday in its first annual report since the IPIC takeover.
"2009 was characterised by sequential quarter-over-quarter improvement starting from operating losses in the beginning of the year and building to operating gains later in the year," the company said in its report. Company officials were not available for comment before press time. IPIC rode to Nova's rescue at the depth of the downturn for chemical makers, as the company wrestled with a mountain of debt and seemed headed for bankruptcy. Analysts at the time called the acquisition price a bargain for the Abu Dhabi fund.
Nova was able to issue $1.05bn of new debt late last year to refinance debt that was maturing this year. IPIC also provided Nova with an additional $350m of direct funding to refinance debts. It became clear over the year that IPIC had been looking for more than a simple acquisition. The fund has announced plans to integrate Nova's expertise into its family of chemicals companies, which includes Borealis and OMV, both of Austria. Tacaamol, an immense chemicals plant planned for Abu Dhabi, was delayed by a year to integrate Nova's technology into what is largely an IPIC project.
IPIC also moved to tie the management structures of the companies together. In November, the chief executive and chief financial officer of Borealis and the deputy chief executive of OMV joined the Nova board of directors. The move followed an agreement in August for Borealis to buy a 24.9 per cent stake in Nova from IPIC. The deal was cleared by European regulators, but a price still needed to be finalised, Nova said yesterday.