Delaware Court Grants Huntsman Request for Expedited Proceeding
July 09 2008 - 5:01PM
PR Newswire (US)
Trial to Begin September 8 THE WOODLANDS, Texas, July 9
/PRNewswire-FirstCall/ -- Huntsman Corporation (NYSE:HUN) today
announced that the Delaware Court of Chancery has granted its
request to expedite the Court's review of Hexion's wrongful and
ongoing efforts to scuttle Hexion's pending merger with Huntsman.
The trial scheduled to begin September 8 will address Hexion's
false allegations that the combined Hexion and Huntsman entity
would be insolvent and that there has been a material adverse
effect under the merger agreement, neither of which are supported
by the facts or the terms of the merger agreement. The Court agreed
with Huntsman that it is necessary and appropriate to have a trial
that will conclude on or about the end of the second week of
September in order to provide sufficient time to consummate the
merger if Huntsman prevails at trial. Huntsman is confident that a
trial on the merits will reveal that Huntsman has not suffered a
material adverse effect, the combined Huntsman-Hexion entity would
not be insolvent, and that Hexion is required to proceed with
consummating the merger. Huntsman reiterates that the merger
agreement has no financing contingency, that it obligates Hexion to
use its reasonable best efforts to obtain required financing, and
that Hexion represented to Huntsman in the merger agreement that
the proceeds contemplated by the financing would be sufficient to
complete the merger. Despite its public pronouncements to the
contrary, Hexion has knowingly sought to impede the very financing
the merger agreement requires it to use reasonable best efforts to
obtain. Rather than making inappropriate statements seeking to
denigrate Huntsman's financial performance, Hexion should be
negotiating definitive documentation with its lenders pursuant to
the lenders' commitment letters, which remain in full force and
effect. At trial, Huntsman also will address directly the deeply
flawed and ill-intentioned insolvency opinion procured on Hexion's
behalf for the sole purpose of justifying its predetermined course
of conduct, as well as its ill-founded claim that Huntsman has
suffered a material adverse effect. Despite absorbing approximately
$1.5 billion in higher raw material, energy and other direct costs,
a weakening in the value of the U.S. dollar, and the negative
effects of the prolonged pendency of the merger, Huntsman's
Adjusted EBITDA for the twelve month period ended March 31, 2008,
at $869 million was only 5% lower than the Adjusted EBITDA recorded
for the comparable LTM period immediately prior to when Hexion
agreed to purchase the business. Furthermore, Huntsman's
performance has not been materially different from that of the
chemical industry over the same period of time. In addition,
Huntsman's net debt level, including its accounts receivable
securitization program, at March 31, 2008, of $4,108 million was
only $100 million or 2% higher than the level at March 31, 2007,
despite the payment of $100 million towards a termination fee to
Basell and an approximately $185 million increase in our foreign
currency denominated debt due to the decline in the value of the
U.S. dollar.* The alleged changes of which Hexion complains are
risks they explicitly agreed to accept in the merger agreement and
in no way amount to a material adverse effect as defined in the
merger agreement. We are confident that the Delaware Court will
support this view. Peter Huntsman, President and CEO, stated, "We
are grateful that the Court has agreed to hear our case in an
expedited fashion. We look forward to a swift repudiation of
Hexion's misguided allegations and apparently disingenuous rhetoric
about their intentions to comply with our merger agreement, all the
while continuing to breach the same." Jon M. Huntsman, Founder and
Chairman of Huntsman Corporation, added, "They may view their
tactics as business as usual, but we have great faith that our
legal system will fully reveal their careless disregard for
contracts and hold them accountable, especially in light of their
assurance to our board and our family that we have an 'ironclad'
agreement." *See table below for a reconciliation of non-GAAP
financial measures to corresponding GAAP financial measures. About
Huntsman: Huntsman is a global manufacturer and marketer of
differentiated chemicals. Its operating companies manufacture
products for a variety of global industries, including chemicals,
plastics, automotive, aviation, textiles, footwear, paints and
coatings, construction, technology, agriculture, health care,
detergent, personal care, furniture, appliances and packaging.
Originally known for pioneering innovations in packaging and,
later, for rapid and integrated growth in petrochemicals, Huntsman
today has 13,000 employees and operates from multiple locations
worldwide. The company had 2007 revenues of approximately $10
billion. For more information, please visit the company's website
at http://www.huntsman.com/. Forward-Looking Statements: Statements
in this release that are not historical are forward-looking
statements. These statements are based on management's current
beliefs and expectations. The forward-looking statements in this
release are subject to uncertainty and changes in circumstances and
involve risks and uncertainties that may affect the company's
operations, markets, products, services, prices and other factors
as discussed in the Huntsman companies' filings with the U.S.
Securities and Exchange Commission. Significant risks and
uncertainties may relate to, but are not limited to, financial,
economic, competitive, environmental, political, legal, regulatory
and technological factors. In addition, the completion of any
transaction described in this release is subject to a number of
uncertainties and closing will be subject to approvals and other
customary conditions. Accordingly, there can be no assurance that
such transactions will be completed or that the company's
expectations will be realized. The company assumes no obligation to
provide revisions to any forward-looking statements should
circumstances change, except as otherwise required by applicable
laws. LTM LTM 3/31/08 3/31/07 Net Income (211) 207 Interest 276 338
Income Tax Expense (21) (52) Depreciation & Amortization 397
458 Income taxes, depreciation and amortization included in
discontinued operations (139) 41 EBITDA 302 992 Loss on accounts
receivable securitization program 21 14 Unallocated foreign
currency loss (gain) 14 (7) Loss on early extinguishment of debt 1
29 Other restructuring, impairment and plant closing costs 35 18
Legal and contract settlements 6 (10) Merger related expenses 215 -
Gain on disposition of assets (69) (96) Loss from discontinued
operations 336 37 Extraordinary (Gain) Loss on the acquisition of a
business 8 (58) Adjusted EBITDA 869 919 DATASOURCE: Huntsman
Corporation CONTACT: Media, Russ Stolle, +1-281-719-6624, or
Investor Relations, John Heskett, +1-801-584-5768, both of Huntsman
Corporation Web site: http://www.huntsman.com/
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