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Chemtura Reveals Plan to Finance Bankruptcy Exit

https://www.chemnet.com   Aug 12,2010
Chemtura Corp. plans to offer “$450 million in aggregate principal amount of unsecured senior notes due 2018,” the company said Aug. 9.


The proposed offering is part of Chemtura’s exit financing package in line with its Chapter 11 plan of reorganization, if the plan is confirmed by the US bankruptcy court. A hearing is scheduled for Sept. 16.


The company also plans to arrange a senior term loan facility of $300 million and enter into a $275 million “senior asset-based revolving credit facility for working capital and general working purposes,” the statement said.


The net proceeds of the notes offering will be put into a segregated escrow account until the company’s plan of reorganization is confirmed by the bankruptcy court, Chemtura said, adding that if the plan is confirmed the proceeds will be used to make payments and fund the company’s emergence from Chapter 11 proceedings.


Meanwhile, Chemtura reported 2010 second quarter sales were up 22 percent year-on-year to $767 million. The company reported a net loss of $41 million from continuing operations in Q2, compared to the second quarter of 2009, an Aug. 6 statement said.


The company’s Industrial Performance Products division, which includes the company’s urethanes and antioxidant/ultraviolet plastic additives activities, reported Q2 sales up 29 percent to $313 million, compared to Q2 2009, driven mainly by higher selling prices and increased volumes, Chemtura said. Volumes were driven up by increased customer demand, improved economic conditions and strong growth in the Asia-Pacific region. Q2 operating profit was up by $17 million to $38 million, compared to the same period last year.


Chemtura’s Industrial Engineered Products business, which includes the company’s flame retardants activities, reported a 44-percent increase in sales in Q2, compared to the second quarter of 2009. The statement said there was increased demand for some old products sold to electronic applications, with “some recovery evident in building and construction, and consumer durable polymers.” Q2 Operating profit rose by $10 million to $7 million, compared to Q2 2009.


On April 30 Chemtura sold its PVC additives business to Galata Chemicals LLC. The results of operations for the business have been removed from Chemtura’s results of continuing operations for all periods.


Chemtura first filed a plan of reorganization with the bankruptcy court on June 17 before filing revised plans on the July 9 and July 20.
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