Kiri Dyes & Chemicals (KDCL) of India has announced that DyStar’s operations in Germany are ready to resume. The firm has secured financing its undisclosed purchase price and met other conditions, including anti-trust approval from Germany’s Federal Cartel Office, thus completing the acquisition of DyStar.

This means that about 750 jobs in Germany, slightly more than half of the 2009 total of about 1,300, have been secured. Plans are to resume production as quickly as possible within Q1 at four of the sites run by DyStar Textilfarben GmbH & Co. Deutschland KG. DyStar will continue to operate independently.

“From where we stand, this is a major success to be able to save four production sites in Germany with so many jobs, given the current difficult economic setting,” said the insolvency administrators, Miguel Grosser of Jaffé Rechtsanwälte and Dr Stephan Laubereau of Pluta Rechtsanwalts.

The arrangement will secure 90 jobs at the indigo facility in Ludwigshafen, which was the only one to carry on full operations while DyStar was in administration, plus about 236 in Leverkusen, 130 in Brunsbüttel and 260 in Frankfurt. The latter three had all started to lay employees off from November for lack of funds to continue paying salaries.

In addition, the jobs of 50 more who carryi out central functions in Frankfurt from purchasing to sales within the separate subsidiary, DyStar Textilfarben GmbH, are saved. They had carried on working even after insolvency proceedings began on 1 December.

KDCL stated that “the vast majority of the staff laid-off in total can now be reemployed”. The largest DyStar facility at Geretsried, however, is not resuming production. Indications are that KDCL is still seeking to sell it.

DyStar, which united the textile dyes and colours interests of BASF, Bayer and Höchst in 1995, originally filed for insolvency on 28 September 2009, after alternative solutions to its liquidity problems had failed. The company was owned at that stage by Platinum Equity.

When DyStar went into insolvency, all bar about 160 of the employees at the manufacturing sites were facing the loss of their jobs, until a buyer was found. The administrators reported that two other firms were also interested but only KDCL’s offer met the requirements and the necessary financing conditions.

The purchase was reportedly made for just €1, though KDCL will also have to invest some €130-135 million to repay debt and restructure DyStar. It is funding this through a combination of €180-220 million in debt and equity in both firms. This will catapult the Ahmedabad-based firm into the top rank in dyes, a market in which DyStar was a global leader with a 21% market share and sales of €830 million in 2008.

Manish Kiri, who is already managing director of KDCL, has been named the new president and CEO of DyStar. He replaces J. Mark Allan, will remain with the company as a strategic advisor for six months to help in the transition of duties and responsibilities.