Bulgarian lead-acid battery manufacturer Monbat has dropped plans to buy a majority stake in Tunisian lead firm Assad.
The decision to scrap the deal, announced last year, came amid reports of an alleged pending legal case concerning the land on which Assad built its production plant— and concern that Monbat would be unable to retain control of an Assad subsidiary in Algeria because of proceedings in that country.
Monbat declined to comment in detail, but a spokesperson said: “In the course of the final stage of the due diligence of L’accumulateur Tunisiene Assad, there were subsequent matters disclosed which are challenging the originally expected value creation and are increasing Monbat’s level of enterprise risk.”
Other projects being financed by Monbat’s recent corporate bond issue are under way and an update will be issued to investors in due course, the Sofia-based company said in a filing with Bulgaria’s Financial Supervision Commission.
Monbat said it would “sustain its investment selectivity and focus on those business projects in the current pipeline, which provide the best match between return and operational risk”.
Assad, founded in 1974, designs, manufacturers, distributes and recycles lead-acid batteries for applications, including automotive, marine, solar, industry and telecoms.
Assad has reported a combined annual production capacity of 1.2 million batteries. The firm’s recycling arm was launched in 2002 to recycle around 10,000 tons of used batteries from the Tunisian market each year.
Monbat was founded in 1959, privatised in 1998 and is now a leading European battery producer. The company has production and recycling plants in three countries and exports worldwide.