February 16, 2009

Volume 87, Number 07

p. 11

Chemtura's Debt

With a deadline looming, firm seeks to avoid bankruptcy, sale of the company

Marc S. Reisch

Specialty chemical maker Chemtura is staring at about $375 million of debt that comes due in July. New CEO Craig A. Rogerson says the firm is now pursuing the sale of certain businesses to pay that looming debt. But he is also looking at other alternatives including negotiating an extension with bond holders, finding an infusion of money from an outside investor, and, as a last resort, declaring bankruptcy.

"The primary avenue we are pursuing is the asset sale," Rogerson, who replaced former CEO Robert L. Wood in December, tells C&EN. The firm is targeting strategic rather than financial buyers. But with credit markets in disarray, there are no guarantees that a sale will take place, and so Chemtura is exploring all options.

Like other chemical firms, Chemtura is reeling from the recession. Fourth-quarter sales dropped 23% to $690 million; sales for the year were off 5% to $3.5 billion. The company plans to release its earnings at the end of the month.

However, Chemtura has been under duress for a long time. It put itself up for sale in December 2007 but didn't find any takers. It suspended its dividend in November 2008. Shortly after Rogerson arrived, the firm said it would reduce costs by $50 million and slash 500 jobs.

Rogerson, who successfully sold Hercules to Ashland last year, says he doesn't plan to tidy up Chemtura for sale. He says he came to the company to lead its revival.

Chemical & Engineering News

ISSN 0009-2347

Copyright © 2009 American Chemical Society