Solutia was founded in St. Louis in 1901 as Monsanto Company. For decades, chemicals were the foundation of Monsanto, which eventually expanded beyond its original identity as a local producer of saccharin to become one of the world's leading chemical companies by the 1960s.
Solutia was created as an independent company on September 1, 1997, after Monsanto shareholders approved the spin-off of the company's chemical businesses. Today, Solutia is a specialty chemicals company with a growth-oriented business strategy that drives our commitment to excellent customer service. A true global enterprise, Solutia has more than $3 billion in annual sales, $4 billion in assets and more than 10,000 employees located at 35 manufacturing sites throughout 13 countries.
Solutia is a major producer for:
July 31, 2001 Solutia, JLM発表
SOLUTIA AND JLM INDUSTRIES, INC. END BENZENE TO PHENOL COMMERCIAL AGREEMENT
Solutia Inc. today announced a mutual agreement with JLM Industries, Inc. to end the commercial agreement to establish a new benzene to phenol plant. The site, which would have used Solutia's AlphOx BtoP technology, was to have been located at Solutia's Pensacola, Florida, facility.
The companies opted to stop plans for the production facility due to current dynamics in the global market for phenol. Both companies have agreed to pursue separate strategies for their business interests in the phenol area.
"Solutia started up a new phenol to KA oil facility at Pensacola earlier this year," said Mike Berezo, director of Nylon Intermediates at Solutia. "And we may certainly decide to explore benzene to phenol production in the future, should the market dynamics change."
"In light of the current imbalance in supply/demand for phenol, I certainly concur with the decision to defer this project and end JLM's involvement," said John Macdonald, chairman and CEO of JLM Industries, Inc. "We are pleased with our other ongoing commercial relationships with Solutia."
Solutia (http://www.solutia.com) uses world-class skills in applied chemistry to create solutions for customers, whose products are used by consumers every day. The company is a world leader in performance films for laminated safety glass and aftermarket applications; resins and additives for high-value coatings; specialties such as aviation hydraulic fluid and environmentally friendly cleaning solvents for aviation; an integrated family of nylon products including high-performance polymers and fibers; and process development and scale-up services for pharmaceutical fine chemicals.
JLM Industries, Inc. is a leading international marketer and distributor of performance chemicals, olefins, petrochemicals, engineered resins and plastics. The company is listed as the sixth largest chemical distributor in North America, and is a manufacturer and merchant marketer of phenol and acetone. JLM affiliates are conveniently located in over 18 countries around the world to serve its customers on a regional and global basis. Visit the JLM web site at http://www.jlmi.com to learn more about the company's worldwide capabilities.
PENSACOLA INTEGRATED NYLON 6,6 PLANT, FLORIDA, USA
In 1998 Solutia Inc.
approved plans to expand its nylon polymerisation capacity at the
company's plant site in Pensacola in Florida in the United
States. The facility is the world's largest integrated nylon 6,6
plant. The new project will expand the American company's
production capacity by approximately 30,000 tonnes/year.
THE NYLON 6,6 EXPANSION
In 1998, Solutia agreed to a joint venture with JLM Industries Inc. to build a phenol facility at the Pensacola plant. Phenol is used as an ingredient in the manufacture of nylon.
The Pensacola plant was originally built in 1953 on a 2,200 acre tract, 12 miles north of Pensacola. The current plant covers over 600 acres, and employs 1,450 staff and approximately 1,350 permanent contract employees at the same site. Solutia Inc. is the world's largest producer of nylon carpet staple, and the facility also produces nylon polymer chips for the automotive and electrical industries.
The expanded plant became fully functional in the last quarter of 1999, and the additional 30,000 tonnes of nylon polymer capacity is currently supporting Solutia's merchant polymer business, as well as its relationship with JLM. The expanded capacity at the Pensacoula plant will be used to supply JLM Industries. This is part of a long-standing relationship between the two companies.
The enhanced plant benefits from Solutia's technological innovations. Much of the initial work on the Pensacoula plant's technology was done at Russia's Boreskov Institute of Catalysis (BIC), although it has been refined by Solutia. The new process involves fewer steps than its predecessors do. It also has lower costs, mainly because it is able to produce adipic acid less expensively. No acetone by-products result from this process.
The new Pensacoula plant also incorporates BusinessBus software, which integrates the supply chain at the plant. It does this partly by using radio frequency technology to track incoming rail cars and trucks. The system has hundreds of process monitoring and control points within the plant, as well as downstream warehouse and distribution partners.
TECHNOLOGICAL DEVELOPMENT FOR NYLON
In 1998, Solutia and Dow Plastics signed an agreement over sales and marketing. Under the terms of this agreement, Solutia continues to develop and manufacture nylon, while Dow has taken over the compounding and marketing. As a result, Solutia's existing sales force became part of Dow's operations. No transfer of assets took place, and Solutia continues to service some key markets such as film, monofilament, carpet and textiles. The Florida company is therefore closely integrated with Dow's operations.
THE MARKET RATIONALE
Solutia decided to make its investment in anticipation of a growing market in the USA and NAFTA. The company forecasted that the nylon market would grow by as much as 6% to 9% between 1998 and early 2000. This growth is believed to be fuelled by end users who are choosier. They seek clothing that is multi-functional, comfortable and easy to care for, and clothing which uses the company's nylon products is believed to best match this description. Solutia also produces nylon 6,6 for the world's engineering thermoplastics (ETP) and merchant nylon spinning industries. Solutia also makes nylon 6,6 for the Vydyne brand name.
The industry has recently seen several textile nylon producers seek plant expansions in a means to profit from growing demand, which suggests that Solutia's analysis of the market is widely shared. Solutia is investing in order to maintain its elf as a leading world supplier.
Solutia is currently considering future expansions to the Pensacoula plant, which could happen over the next two years. This is in anticipations of future increases in textile demand.
2003/12/17 Solutia → 承認
Seeking Relief from
Former Monsanto Company Legacy Liabilities, Solutia Files
Voluntary Petition for Chapter 11 Reorganization
Worldwide Operations Continue Without Interruption
Company Obtains Commitment for $500 million in Debtor-in-Possession Financing
Solutia Inc. (NYSE:SOI),
a leading manufacturer and provider of performance films,
specialty chemicals and an integrated family of nylon products,
announced today that it and 14 of its U.S. subsidiaries have
filed voluntary petitions for reorganization under Chapter 11 of
the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the
Southern District of New York. Solutia's affiliates outside the
United States were not included in the Chapter 11 filing. Solutia
has approximately 6,700 employees worldwide.
During the Chapter 11 proceedings, Solutia's worldwide operations will operate without interruption. The Company has taken steps to ensure continued supply of goods and services to its customers. In that regard, Solutia has received a commitment for up to $500 million in new debtor-in-possession (DIP) financing (注 民事再生手続等申請後、計画認可決定までの期間の運転資金つなぎ融資）, $350 million of which will replace Solutia's current senior credit facility. Upon Court approval, the DIP financing, combined with the Company's cash from operations, will provide sufficient funding for operations during the Chapter 11 process.
Vendors will be paid in full for all goods furnished and services provided after the filing date as required by the Bankruptcy Code. The Company has requested Court approval to continue to pay employees without disruption and in the same manner as before the filing, and expects the request to be granted as part of the Court's “first day” orders.
The decision to file was made to obtain relief from the negative impact on the Company caused by legacy liabilities, which include litigation and settlement costs, environmental remediation and Monsanto retiree healthcare obligations, Solutia was required to assume when the Company was spun-off from the former Monsanto Company, which is now known as Pharmacia, a wholly owned subsidiary of Pfizer. These legal liabilities have been an obstacle to Solutia's financial stability and success. Under the U.S. Bankruptcy Code, these liabilities will be discharged as pre-petition liabilities pursuant to a plan of reorganization.
“Solutia has spent approximately $100 million each year to service legacy liabilities that it was required to accept at the time of the spin-off from Monsanto,” said John C. Hunter, chairman, president and chief executive officer of Solutia. “We have taken aggressive steps to offset these legacy costs and strengthen our financial health by cutting more than $100 million from our operating costs, working with Monsanto Corporation to resolve the onerous Alabama PCB litigation, refinancing our credit facility and beginning to restructure our broader debt portfolio. Concurrently, we have made every effort to come to an out-of-court resolution with Monsanto regarding these legacy liabilities. However, these negotiations have not been successful.
“We simply could not continue to sustain our operations burdened by Monsanto's legacy liabilities, which, combined with the weakened state of the chemical manufacturing sector, current economic conditions and the continuing high energy and crude oil costs with unprecedented volatility, has prevented us from realizing Solutia's true value,” added Hunter.
“Today's action represents a significant step for Solutia, a turning point that allows us to take control of our future. We believe that the Chapter 11 process will give us a forum to shed these burdensome liabilities and to compete on a more level playing field with others in our industry.
“The protections afforded by Chapter 11 allow us to restore our focus on operations, improve our balance sheet and realize the full value of our businesses. In addition, the Company will be better positioned to continue to provide its customers with the high quality products and exceptional services they have grown to expect from Solutia.
“When we successfully emerge from Chapter 11, Solutia's employees, customers, and vendors can look forward to a company that can grow and compete successfully in its marketplaces,” Mr. Hunter said. “We appreciate the ongoing loyalty and support of our employees. Their dedication and hard work are critical to our success and integral to the future of the Company. I would also like to thank our customers, vendors and business partners for their continued support during this process.”
Additional information on Solutia's Chapter 11 reorganization is available from the Company's web site, www.Solutia.com.
2003/8/20 Solutia Inc.
Solutia Reports Settlement of Alabama PCB Litigation; $600 Million Cash Settlement and Community Outreach Programs
Solutia Inc. (NYSE: SOI) today announced a settlement resolving the Abernathy and Tolbert PCB litigation against the Company in Alabama.
The settlement, which includes no admissions of wrongdoing, will be funded by Solutia, Monsanto Co. and Pharmacia, a wholly-owned subsidiary of Pfizer and the companies' commercial insurers. It resolves all outstanding claims including potential punitive damages that might have been sought by plaintiffs and their lawyers. Solutia's portion of the settlement will be $50 million paid in equal installments over a period of 10 years.
"We are glad to have this litigation behind us as it removes a burden for the Company, its employees and stakeholders; and the community of Anniston, Alabama," said John C. Hunter, chairman and chief executive officer. "This settlement puts the Company in a better position in the coming months to refinance its bank facility and to address upcoming bond maturities, pension funding obligations and other legacy liabilities."
Mr. Hunter added, "While there is substantial scientific evidence which demonstrates that exposure to PCBs does not cause serious long-term health impacts to people, continuing to battle these matters in the courts would have taken many years and would have continued to drain the resources of the Company and the vibrancy of the Anniston community."
The settlement, which concludes these cases in state and federal court, respectively, resulted from mediation conducted by The Honorable U.W. Clemon, Senior Judge, United States District Court for the Northern District of Alabama, and The Honorable R. Joel Laird, jr., State Circuit Court Judge, Calhoun County, Alabama. Participants in the mediation included Solutia, Monsanto, Pharmacia and lawyers for the plaintiffs.
"We commend the judges for their professionalism and even-handedness in bringing about a resolution of these cases. We share their vision that by solving these matters, it will allow the community to begin a healing process," Mr. Hunter said.
The terms of the agreement were stipulated by all parties in a court session Wed., Aug. 20, 2003 before the respective judges in the two cases. The settlement is subject to the parties entering into a final agreement and approval by the court which are expected by Aug. 26, 2003, with funds being transferred by Aug. 29, 2003.
The cash settlement totals $600 million, with Solutia's $50 million portion to be paid over time. Approximately $160 million of the cash settlement will be provided through the settling Companies' commercial insurance. The remaining approximately $390 million will be provided by Monsanto.
In addition, as part of the settlement, Solutia arranged for a broad array of community health initiatives for low-income residents of Anniston and Calhoun County to be undertaken by Pfizer Corporation. These programs are valued at more than $75 million over the next 20 years.
Solutia has also agreed to issue Monsanto warrants to purchase 10 million shares of Solutia common stock. The warrants are exercisable if Solutia's common stock reaches a certain price target or upon a change-of-control of Solutia.
"Solutia and Monsanto Company, now known as Pharmacia, have acted responsibly as producers and employers in the Anniston, Alabama community. Solutia plans to remain an integral part of the community. Judge Clemon's recent approval of a Consent Decree between Solutia, the EPA and the Department of Justice allows the Company to proceed with an expedited residential cleanup in Anniston, while simultaneously developing a comprehensive cleanup plan for the community," Mr. Hunter noted.
Solutia gets court approval for DIP
Troubled US chemical producer Solutia received interim court approval of a $500-mil debtor-in-possession credit facility, $350-mil of which will replace its current senior credit facility, Solutia reported Friday. The company also received approval of a number of "first day motions" from the US Bankruptcy Court for the Southern District of New York, including authorization to continue paying employee wages, employee business expenses and obligations under the Company's self-insured and third-party insured benefit plans, as well as certain Company-sponsored benefit programs, without interruption. Solutia voluntarily filed for protection under Chapter 11 of the US Bankruptcy Code Wednesday.
2004-1-15 Asia Chemical Weekly
Monsanto Reiterates It
May Get Some Solutia Liabilities
Monsanto Co. reiterated in its 10-Q filing Wednesday that it may get stuck with some legal liabilities stemming from Solutia's Chapter 11 bankruptcy filing last month.
Monsanto also said in the filing with the Securities and Exchange Commission that it's unclear what effect the bankruptcy proceeding will have on Monsanto's ability to get reimbursed by Solutia for the liabilities.
It's possible that Monsanto's obligation to indemnify Pfizer Inc. Pharmacia unit "will result in a material adverse effect on Monsanto's financial position, profitability and/or liquidity," the company said in the filing. Monsanto also reiterated that there are too many uncertainties to "reasonably estimate" any possible costs in the matter.
Monsanto executives said during a Dec. 17 conference call that the company won't take on any financial obligations that aren't its own. Chief Financial Officer Terry Crews also said then that Monsanto could have some potential legal liabilities, depending on what happens in bankruptcy court, for Solutia's post- retirement benefit costs, environmental remediation costs and litigation costs.
Solutia filed for Chapter 11 bankruptcy protection on Dec. 17, citing the debt and legacy liabilities it inherited when it was spun off in September 1997 from the Monsanto that existed prior to that company's merger with what was then Pharmacia & Upjohn Inc. That merged business was eventually purchased by Pfizer.
Solutia, Monsanto and Pfizer's Pharmacia unit had indemnification clauses in the respective spin-off and merger contracts, describing who would pay the bills if one of the companies couldn't. Monsanto indemnified Pharmacia for certain liabilities assumed by Solutia at its 1997 spinoff if Solutia fails to pay those liabilities.
Monsanto also said in the filing that the U.S. District Court for the Northern District of Alabama on Jan. 8 turned down most of a claim by plaintiffs in the Owens vs. Monsanto lawsuit.
The 1,600 plaintiffs, who claimed they were harmed by polychlorinated biphenlys (PCBs) from a former Monsanto plant in Anniston, Ala., agreed to a settlement of $40 million in April 2001. But the plaintiffs claimed they were entitled to about $100 million more because of the August 2003 settlement in the Tolbert vs. Monsanto and Abernathy vs. Monsanto PCB-related lawsuits.
The court awarded the plaintiffs an additional $1.3 million, or about $800 per plaintiff, Monsanto's filing said.
In its description of contingent liabilities relating to Solutia in its 10-Q filing, Monsanto said the liabilities are considered an off balance sheet arrangement under SEC rules. It's the first time Monsanto has used the term "off balance sheet" in its description of the liabilities.
The SEC has various categories of guarantees in general and Monsanto's " connection" with Solutia puts the contingent liabilities into a category where the term off balance sheet is appropriate, Monsanto spokeswoman Lori Fisher said.
Solutia to Exit Acrylic Fibers Business
Solutia Inc. announced Tuesday that it will exit the acrylic fibers business, pending approval by the U.S. Bankruptcy Court. The company's plant in Decatur, Ala., will continue to operate as a producer of chemical intermediates for use in nylon products, but will close its acrylic fiber operation in early-to-mid April. This action will impact approximately 250 Solutia employees and 200 contractors, most of whom work at the Decatur plant.
"Despite the tremendous efforts of those within our acrylic business to reduce costs and improve productivity, the business has simply been unable to compete as fiber and textile manufacturing has moved outside the United States," said John Saucier, president of Solutia's Integrated Nylon platform.
This matter is subject to bankruptcy court approval, and is scheduled to be heard in the U.S. Bankruptcy Court for the Southern District of New York on Feb. 17, according to the company.
2007 /9/26 Solutia
Poised to Emerge From Bankruptcy After Reaching Settlement With
All Major Constituents in Chapter 11 Case
Settlement Forms Basis for Consensual Plan of Reorganization -- Supported by Ad Hoc Committee of Solutia Noteholders, Official Committee of Equity Security Holders, Official Committee of Unsecured Creditors, Monsanto Company, Pharmacia Corporation, Official Committee of Retirees, and Ad Hoc Committee of Trade Creditors -- Resolves Pending Litigation and Objections -- Maintains Key Benefits of Original Plan of Reorganization for Solutia, Including Relief from Legacy Liabilities
Solutia Inc., a leading manufacturer and provider of high-performance specialty materials and chemicals, today announced it has secured the support of all of the major constituents in its Chapter 11 cases for a consensual plan of reorganization.
"I am extremely pleased to announce today that we have reached a comprehensive settlement with all of the major constituents in our bankruptcy case that will form the basis for a revised consensual plan of reorganization that will be filed within the next few days," said Jeffry N. Quinn, chairman, president and chief executive officer of Solutia Inc. "The revised plan will position Solutia to emerge from bankruptcy by the end of this year as a financially healthy organization well-positioned to create significant value for its stakeholders."
"The revised plan will provide for $250 million of new investment in reorganized Solutia through a backstopped rights offering to certain creditors, as well as a reallocation of the legacy liabilities that Solutia assumed when it was spun off. Importantly, it also will provide for a resolution of all the litigation between the settling parties including a potential appeal by our noteholders, the adversary proceeding filed by our current equity holders against Monsanto and Pharmacia, and related objections to the Monsanto and Pharmacia claims."
The settlement and revised plan is supported by the Ad Hoc Committee of Solutia Noteholders (the "noteholders"), the Official Committee of Equity Security Holders (the "equity security holders"), the Official Committee of Unsecured Creditors (the "general unsecured creditors"), Monsanto Company (NYSE:MON) ("Monsanto"), Pharmacia Corporation ("Pharmacia"), the Official Committee of Retirees (the "retirees"), and the Ad Hoc Committee of Trade Creditors (the "ad hoc trade creditors"). As part of the settlement, the following parties executed agreements earlier this month in support of the settlement and revised plan of reorganization: Monsanto, noteholders controlling at least $300.1 million in principal amount of the 2027/2037 notes, the official committee of general unsecured creditors, the official committee of equity security holders, the ad hoc trade committee, and Solutia. The support agreements became effective on September 6, 2007.
Solutia will update its disclosure statement and plan of reorganization to reflect the terms of the settlement, and anticipates filing these documents with the U.S. Bankruptcy Court for the Southern District of New York promptly. An October 10, 2007 court date has been set seeking approval of the disclosure statement. Once approved, the disclosure statement will be sent to Solutia's creditors and equity interest holders for voting purposes. Following the voting process, the court will hold a hearing to approve or "confirm" the plan.
"Since beginning the chapter 11 process, we have concentrated on the implementation of a reorganization strategy focused on enhancing our financial and operating performance, changing our portfolio so that it consists of high potential businesses, and achieving a reallocation of legacy liabilities. I am pleased to say that the men and women of Solutia have been very successful in executing this strategy and, as a result, we are able to provide enhanced recoveries for all creditor constituencies, including current equity holders," added Quinn. "The revised plan also situates us well to deliver the fourth component of our strategy for rehabilitating our company -- exiting bankruptcy with a competitive capital structure."
James M. Sullivan, chief financial officer of Solutia, noted, "Despite the recent turbulence in the debt capital markets, I am confident that Solutia will be able to secure the necessary exit financing package to consummate the revised plan. We have improved our earnings, reduced our risk profile, gained the infusion of new money investment through the rights offering, and will propose a capital structure with moderate leverage. We are moving forward in earnest with the exit financing process and plan to put financing in place consistent with our emergence timeframe."
Major Terms Underlying Settlement and Consensual Plan of Reorganization
$250 Million of New Investment
The revised plan will provide for $250 million of new investment in reorganized Solutia. This investment will be in the form of a rights offering to the noteholders and general unsecured creditors, who will be given the opportunity to purchase shares of the new common stock on a pro rata basis at a 33.3% discount to the implied equity value. The rights offering will be backstopped by a group of Solutia's creditors (i.e. they will purchase any shares not bought by other creditors). For this commitment they will receive a fee of 2.50% and an allocation of 15% of the rights offering.
The $250 million generated as a result of the rights offering will be used as follows: $175 million will be set aside in a Voluntary Employees' Beneficiary Association (VEBA) Retiree Trust to fund the retiree welfare benefits for those pre-spin retirees whom receive these benefits from Solutia; and $75 million will be used by Solutia to pay for other legacy liabilities being retained by the company.
Relief from Tort Litigation and Environmental Remediation Liabilities
Consistent with Solutia and Monsanto's prior agreement, the settlement provides that Monsanto will take on financial responsibilities in the areas of tort litigation and environmental remediation.
-- Monsanto will be financially responsible for all current and future tort litigation costs arising from Pharmacia's chemical business prior to the Solutia spinoff. This includes litigation arising from exposure to PCBs and other chemicals.
-- Monsanto will accept financial responsibility for environmental remediation and clean-up obligations at all sites for which Solutia was required to assume responsibility at the spinoff but which were never owned or operated by Solutia. Solutia will remain responsible for the environmental liabilities at sites that it presently owns or operates.
-- Solutia and Monsanto will share financial responsibility with respect to two sites. Under this cost-sharing arrangement the first $50 million of post-emergence remediation and cleanup costs will be funded by the proceeds of the rights offering described above. Upon emergence, Solutia would be responsible for the funding of these sites up to an agreed upon amount.
Thereafter, if needed, Monsanto and Solutia would share responsibility equally.
Current Equity Holders New Common Stock Purchase Option
Under the revised plan, in addition to the consideration described below, current equity holders that own at least a specified number of shares of Solutia common stock will receive rights to purchase, at the time of the company's emergence from bankruptcy, a pro rata share of up to 17% of the new common stock for $175 million which is at a discount from the implied equity value under the revised plan. The proceeds from the sale of this equity will fund a cash payment to Monsanto of up to $175 million. Any portion of the 17% of the new common stock that is not purchased by current equity holders will be distributed to Monsanto under the revised plan.
Settlement of Litigation and Claims Objection
Each of the settling parties has agreed to stay all pending litigation relating to Solutia's chapter 11 cases until the effective date of the plan, at which time this litigation will be dismissed. This includes objections to the disclosure statement and plan of reorganization filed by the noteholders and the equity security holders, the adversary proceeding filed by the equity security holders against Monsanto and Pharmacia, objections to the claims filed in the case by Monsanto and Pharmacia, and the noteholders' appeal of the decision in the litigation related to the secured or unsecured nature of their claims.
Composition of Board of Directors
Under the revised plan, reorganized Solutia's Board of Directors will be comprised of nine members, including: Jeffry N. Quinn, Solutia's chairman, president and chief executive officer; J. Patrick Mulcahy, a current director of Solutia; one director designated by each of Monsanto, the general unsecured creditors and the noteholders; and four directors designated by a five-person search committee consisting of Mr. Quinn, two representatives from the noteholders and one representative each from the general unsecured creditors and the ad hoc trade creditors. Solutia has engaged the services of Spencer Stuart, a global search firm, to begin the process of helping identify and recommend highly qualified board candidates.
Anticipated Creditor Recoveries and Equity Ownership
Assuming full subscription to the rights offering by the participating parties (including the backstop parties), a full exercise of the new common stock purchase option, and an estimated general unsecured claims pool of $342 million, the following creditors and equity security holders will receive the following distributions.
-- General Unsecured Creditors will receive their pro rata share of 31.4% of the new common stock, resulting in a recovery of 80.6 cents on the dollar.
-- Noteholders will receive their pro rata share of 43.8% of the new common stock, resulting in a recovery of 88.4 cents on the dollar.
-- Monsanto will receive up to $175 million in cash. Any shares of new common stock not purchased by current equity holders pursuant to the new common stock purchase option will be distributed to Monsanto and the cash distribution reduced accordingly.
-- Equity Security Holders will receive their pro rate share of 1% of the new common stock and pursuant to the new common stock purchase option described above, holders that own at least a specified number of shares of Solutia common stock will receive rights to purchase a pro rata share of up to 17% of the new common stock.
Assuming the new common stock purchase option is fully exercised, current equity security holders will own up to 18% of the new common stock.
Additionally, current equity security holders will have the following rights: i) holders who own at least a specified number of shares of Solutia common stock will receive their pro rata share of five-year warrants to purchase 7.5% of the common stock; and ii) holders who own at least a specified number of shares of Solutia common stock will receive the right to participate in a buy out for cash of general unsecured claims of less than $100,000 for an amount equal to 52.35% of the allowed amount of such claims, subject to election of each general unsecured creditor to sell their claim.
-- Retirees will receive the benefits provided for under the terms of the settlement between Solutia and its retirees, which was previously announced and is not being altered by the settlement announced today. In accordance with that settlement, the retirees, as a class, will receive 2% of the new common stock.
This stock will be deposited into a VEBA trust that will be used to pay retiree welfare benefits. This is in addition to the $175 million from the rights offering that will also be deposited into the VEBA trust.
-- Backstop Parties (the backstoppers of the rights offering) will own 4.7% of the new common stock.
General Plan Assumptions
Solutia will be an independent, publicly traded company listed on a national exchange. The enterprise value of reorganized Solutia is currently estimated to be approximately $2.85 billion, with corresponding implied reorganization equity value of approximately $1.2 billion. In total, 59.75 million common shares will be issued and allocated upon emergence, exclusive of an anticipated management incentive plan to be approved as part of the revised plan of reorganization.
"This settlement is the result of difficult negotiations that lead to compromise. A tremendous amount of hard work by all of the various constituents has gone into this reorganization process and I want to thank everyone who has been involved," stated Quinn.
Solutia Inc. emerges from Chapter 11 as a market-leading specialty chemicals company with global leadership positions in each of its business segments
Solutia Inc. today emerged from Chapter 11 reorganization. "Solutia has emerged as a well-positioned specialty chemicals and performance materials company with market-leading global positions and a diverse portfolio of high potential businesses," said Jeffry N. Quinn, chairman, president and chief executive officer. "We believe we are a stronger, healthier and more competitive company than at any point in our history. Over the past four years, we have transformed our portfolio through strategic acquisitions, internal investments, asset dispositions, and the re-deployment of significant nylon assets to higher-value uses."
During its time in Chapter 11, Solutia has diversified from both an end-market and a geographic perspective. In 2007, the company's net sales from outside the United States were 55% of the total revenue, compared to 39% in 2003. The increase has been driven primarily by Solutia's Asian growth strategy, as well as significant growth in Europe.
"During this period, we have made great strides in improving our financial position by reducing legacy liabilities, enhancing and focusing the business portfolio and delivering strong revenue and operating earnings growth and momentum," said James M. Sullivan, senior vice president and chief financial officer. "With a strong balance sheet and more than 50% of our portfolio growing at greater than two times global GDP, we believe we are positioned to deliver increased shareholder value."
As previously announced, on November 29, 2007, the U.S. Bankruptcy Court for the Southern District of New York confirmed Solutia's plan of reorganization and approved the company's exit from bankruptcy subject to certain conditions including the funding of an exit financing facility. Today Solutia's $2.05 billion exit financing facility was funded by Citigroup Global Markets Inc., Goldman Sachs Credit Partners L.P., and Deutsche Bank Securities Inc. This exit financing is being used to pay certain creditors, and for ongoing operations.
The new common stock of reorganized Solutia is scheduled to begin trading on the New York Stock Exchange under the ticker symbol SOA on Monday, March 3, 2008. (Currently the stock symbol also includes the "WI" notation). The "old" Solutia stock, which was trading over-the-counter under the SOLUQ ticker symbol, together with warrants or options to purchase old common stock, were cancelled as of today.
About Solutia Inc.
Solutia is a market-leading performance materials and specialty chemicals company. The company focuses on providing solutions for a better life through a range of products, including Saflex(r) interlayer for laminated glass, CPFilms(r) aftermarket window films, high-performance nylon polymers and fibers sold under brands including Vydyne(r) and Wear-Dated(r), Flexsys(r) chemicals for the rubber industry, and specialty products such as Skydrol(r) aviation hydraulic fluid and Therminol(r) heat transfer fluid. Solutia's businesses are world leaders in each of their market segments. With its headquarters in St. Louis, Missouri, USA, the company operates globally with approximately 6,000 employees in more than 60 countries. More information is available at www.Solutia.com.
May 19, 2008 Solutia
Solutia Breaks Ground at
Plant in Springfield, Mass., for Expansion of PVB Resin
Global Tightness in Supply and Growth in Demand Drive Expansion Projects Throughout the Saflex Business
Saflex(R), a unit of Solutia Inc., will break ground today for an expansion of its PVB resin manufacturing operations at its plant in Springfield, Mass., USA. The expansion will add 12,000 metric tons of annual capacity, which is planned to come on-stream in early 2009.
"This project marks another major step in Solutia's global investment program for Saflex," said Luc De Temmerman, senior vice president of Solutia Inc. and president of the Saflex business. "Despite significant increases in raw material costs, we are continuing to make the investments necessary to help our customers grow their businesses. This expansion, as well as the other previously announced expansions we are making throughout our global asset base, will help meet increasing demand for PVB, and is necessitated by the tight supply conditions in the PVB market."
Polyvinyl butyral (PVB) resin is the key raw material used in making PVB sheet, which Solutia markets under the Saflex brand name. The resin expansion will help feed the plant's Saflex PVB sheet manufacturing operations, which have increased their collective output by approximately 50 percent over the past few years. The Springfield plant was the industry pioneer in the development and production of plastic interlayers for laminated glass, which it began more than 80 years ago. Today it hosts Solutia's largest Saflex manufacturing site in North America, playing a critical role in serving Saflex customers around the world. The Springfield plant also is home to the Technical Center for Solutia's Saflex and Specialty Fluids businesses.
In addition to the PVB resin expansion project in Springfield, Saflex announced earlier this month that it will expand its PVB resin manufacturing facilities in Antwerp, Belgium, adding 15,000 metric tons of annual capacity that is planned to come on-stream in 2010. The additional resin capacity at Antwerp will feed the new Saflex PVB sheet extrusion line in Ghent, Belgium, which will start up later in 2008 and will create 40 million square meters of new capacity once it ramps up to full production.
In addition to the Springfield, Antwerp, and Ghent projects noted above, Solutia has recently constructed a new Saflex PVB sheet production facility in Suzhou, China, and added capability at its Saflex PVB sheet production facility in Santo Toribio, Mexico.
Saflex is known globally as the leader in PVB quality and reliability. When laminated between layers of glass, Saflex PVB interlayers greatly enhance the performance characteristics of glass, providing benefits such as safety, security, UV protection, and sound attenuation. For more information about Saflex visit: www.saflex.com
Jun 30, 2008 Solutia
Solutia Retains HSBC to Explore Strategic Alternatives for Its Nylon Business
Inc. today announced that it has retained HSBC Securities
(USA) Inc. to explore strategic alternatives with respect
to its nylon business, including a possible sale.
We have transformed our nylon business from a North American-focused fiber business into the world's second-largest producer of nylon 66 plastics, commented Jeffry N. Quinn, chairman, president and chief executive officer of Solutia Inc. The nylon business is on a path for further growth and improvement in financial performance, and we believe strongly in the strategic course we have set for the business. However, given the strength of our high-margin specialty chemical and performance materials businesses and the current industry dynamic in the nylon segment, it is an appropriate time to explore strategic alternatives available with respect to the nylon business that would better position both the nylon business and the rest of Solutia for reaching their ultimate potential.
In 2007, the nylon business generated net sales of $1,892 million or approximately 51% of Solutia's total revenue, and adjusted EBITDAR of $106 million, or 28% of Solutia's total pro forma adjusted EBITDAR(Earnings Before Interest, Taxes, Depreciation, Amortization and Rent). In 2008, first quarter net sales for the nylon business were $468 million, an increase of 10% when compared to the first quarter of 2007; however, the business' adjusted EBITDAR was a loss of $7 million for the quarter, a decrease of $35 million year-over-year, largely due to higher raw material costs that were only partially recovered with higher selling prices in the quarter. In contrast, Solutia's other three business platforms -- Saflex(r), CPFilms(r), and Technical Specialties, which generated net sales of $1,850 million and adjusted EBITDAR of $270 million in 2007, generated $108 million in adjusted EBITDAR in the first quarter 2008, an increase of 23% over the same period in 2007.
Solutia's nylon business is one of only two world wide businesses that own the complete range of technology to produce nylon 66. The business is able to efficiently serve global markets from its integrated set of world-scale, flexible assets located in North America. During 2007, 28% of the business' sales came from Asia. With its 2008 addition of 68,000 metric tons of capacity for Vydyne(r) and Ascend(r) nylon 66 resins and polymers, that percentage is expected to rise further, driven by rapidly growing demand among Asian producers of automotive, electrical, and consumer goods.