Danish pension administrator Pensionskassernes Administration has decided to buy out troubled tyre recycling firm Genan, just three days after it emerged that it was working to protect its 48% stake – worth DKK1bn (€134m) – in the firm.
In a statement, PKA said it had reached agreement with company founder and ousted chairman Bent Nielsen to acquire his 52% stake, making the pension scheme full owner of the company. Financial details were not disclosed.
“It’s been a difficult process that, quite frankly, PKA could have done without. But now I’m relieved to say that there is a solution that we and the banks are happy with,” said PKA Chief Executive Peter Damgaard Jensen. “Now that the situation has been calmed, we can get to see how to best manage the business, as we believe very much in the idea.”
Amid press reports that Genan was on the brink of collapse, PKA said on Monday (August 12) that it was doing its utmost to protect its investment. But Jensen also said that PKA’s solvency and benefits would not be affected if the company failed.
Nielsen has been replaced by Jens Kampmann, a former Social Democratic politician whose investment firm was bought out by PKA in 2007.However, neither PKA nor Genan have said why the company was suddenly thrown into crisis. Today (August 14), a PKA spokesman also had no further comment on Genan beyond the statement released by the fund.
Danish news reports have suggested Genan – which has expanded rapidly recently – faced DKK1.5bn of debt. Since the start of the year, Genan has opened recycling plants in France and the US, bringing the total to five.
“A solution that we and the banks are happy with”
Genan does not publish business reports or provide much detail about its structure. On its website, Genan merely states that since its start in 1990, it has become the leading recycler of old tyres, the remnants of which are used in asphalt roads or artificial turf. According to Genan, its method saves between 1-2 tonnes of CO2 per tonne of tyres recycled.
PKA looks after DKK195bn in assets from five Danish health care and social services pension schemes. Ninety percent of the 260,000 beneficiaries for those schemes are women, who have been instrumental in PKA’s embrace of responsible investment.