Czech Cyanide Company Sees Oaktree Investment as Step Toward IPO

(Bloomberg) -- Czech chemicals company Draslovka AS said an investment from Oaktree Capital Management LP will help fund its fast-growing business and could prepare it for a potential listing in the U.S. or Europe.

The world's biggest producer of solid sodium cyanide, used to extract gold and silver from ore, is aiming for an initial public offering in about five to seven years, according to Draslovka CEO Pavel Bruzek. Under the strategic partnership, the alternative-investment specialist has agreed to provide $150 million in preferred equity capital and may help guide the Czech company's transformation, he said in an interview on Wednesday.

“Oaktree could help us on the road to an IPO,” Bruzek said.

A listing would further raise Draslovka's profile as it keeps expanding abroad. In December, the company completed a $521 million acquisition of the Mining Solutions unit from U.S.-based Chemours Co. and set a goal to triple the combined entity's revenue to about $1 billion in a decade.

More recently, it bought Mining and Process Solutions in Australia, the owner of exclusive rights to a method of leaching metals using glycine. That non-toxic chemical may appeal to some regulators and customers as an environmentally safer alternative to acidic leaching and sodium cyanide. Being the sole owner of the technology could give Draslovka an extra edge and expand its role in sustainable extraction to include copper, nickel and molybdenum.

The company also expects to overcome a regulatory review that is holding up a takeover of Sasol Ltd.'s sodium-cyanide business for 1.46 billion rand ($95 million), agreed last July, and complete the deal in the second half of 2022. While Draslovka remains open to further acquisition opportunities, there are no immediate major plans or targets, said the CEO.

Founded in 1906, Draslovka is now jointly owned by four Czech families through Prague-based firm BPD Partners. They see their involvement in the business as “very long-term,” according to Bruzek, who is also chairman of BPD's board. Eventually, they could float a minority stake in the U.S. or on a European stock exchange.

“This is a super-strong and stable company,” said Bruzek. “Our preferred scenario is an IPO, because then we can keep control while potentially having a bit more liquidity for other investments.”