Huntsman Reaches Settlement With Banks for $1.73 Billion of Cash and Financing
June 23 2009 - 11:51AM
PR Newswire (US)
THE WOODLANDS, Texas, June 23 /PRNewswire-FirstCall/ -- Huntsman
Corporation (NYSE:HUN) today announced it has reached agreement
with Credit Suisse and Deutsche Bank (the "Banks") to settle
Huntsman's claims and end the ongoing trial against them in Texas
state court for fraud and tortious interference in connection with
Huntsman's terminated merger agreements with Basell and Hexion
Specialty Chemicals, Inc. Under the terms of the settlement
agreement, the Banks are providing the following to Huntsman today:
-- $620 million in cash -- $500 million senior secured term loan
financing, 7 year term at LIBOR + 2.25% -- $600 million unsecured
note financing, 7 year term at 5.5% -- $12 million reimbursement of
litigation costs Including the $1.0 billion settlement with Hexion
and Apollo in December of 2008, cumulative settlement proceeds
total in excess of $2.7 billion. The settlement proceeds from the
Banks will be used to repay certain of Huntsman's outstanding
indebtedness and further enhance the company's liquidity. The
company intends to continue to pay its quarterly dividend of $0.10
per share. It is currently expected that Huntsman will use
settlement proceeds to repay its $295 million of senior secured
notes (due 2010, rate of 11.625%). Huntsman also intends to
substantially reduce the size of its current revolving credit
facility due 2010. Huntsman expects the $620 million of cash
proceeds to incur cash taxes at a rate of approximately 23% which
will eliminate its domestic tax net operating loss position. Peter
Huntsman, President and CEO, stated: "This settlement with the
Banks marks a very successful conclusion to this litigation for the
company and all of its stakeholders. The cash and financing will
enhance our already enviable cash position to more than
approximately $1.7 billion and provide us much greater flexibility
as we manage our business. The financing offers us a much lower
average cost of borrowing and extends the maturities of our
borrowings such that the earliest meaningful maturity is July 2012.
We are well positioned to prosper as we move forward past this
concern." Jon M. Huntsman, Founder and Executive Chairman of
Huntsman Corporation, commented: "I am very pleased with this
settlement by the Banks. Our officers and trial team did an
outstanding job at trial and I believe this settlement reflects
those efforts and the integrity with which our company conducts its
business. We will put these proceeds to good use as we press
forward to write the next successful chapter of our company
history." Pro forma net debt as of March 31, 2009 reduces from $3.3
billion to $2.8 billion. Below is a summary of the company's debt,
pro forma adjusted to include the likely use of settlement
proceeds: Huntsman Corporation Pro Forma Capitalization as of March
31, 2009 Pro forma March $in Millions March 31, 2009 Adjustments
31, 2009 Debt: Senior Secured Credit Facility 1,524 500(a) 2,024
Senior Secured Notes 295 (295) - Senior Notes 198 600(a) 798 Senior
Subordinated Notes 1,238 - 1,238 Other Debt 284 - 284 HC
Convertible Notes 235 - 235 Total Debt 3,774 805 4,579 Total Cash
473 1,271(b) 1,744 Net Debt $3,301 $2,835 Off Balance Sheet A/R
Securitization $328 $328 (a) Bank settlement financing above shown
at face value, future GAAP financial statements will reflect at
fair market value which may differ from the face amount. (b) Cash
adjustments exclude the benefit of litigation reimbursement costs
of up to $12 million and are net of estimated cash taxes of $144
million. 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 more than 12,000 employees and operates from
multiple locations worldwide. The Company had 2008 revenues
exceeding $10 billion. For more information about Huntsman, 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 transactions 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. DATASOURCE: Huntsman
Corporation CONTACT: Media, Russ Stolle, +1-281-719-6624; or
Investors, Kurt Ogden, +1-801-584-5959, both of Huntsman
Corporation Web Site: http://www.huntsman.com/
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