BY Fraser Tennant
Following a period of mounting losses, UK-based chemical giant Venator Materials PLC has agreed a recapitalisation plan with its lenders and noteholders as part of a bid to rescue the business.
To be implemented through a pre-packaged Chapter 11 bankruptcy in the US, the plan will equitise nearly all of Venator’s funded debt, strengthen its balance sheet and facilitate an infusion of new capital, which will position the company for future growth and success.
Moreover, the plan will be financed by a debtor-in-possession (DIP) financing facility, which includes a commitment for $275m in new-money financing from the company’s supporting creditors.
Following approval by the court, the DIP financing, together with cash on hand and cash generated from ongoing operations, is expected to provide substantial liquidity to support Venator throughout the recapitalisation process and beyond.
A global manufacturer and marketer of chemical products, Venator’s offerings comprise a broad range of pigments and additives that bring colour and vibrancy to buildings, protect and extend product life and reduce energy consumption. Based in Wynyard, UK, the company employs approximately 2800 associates and sells its products in more than 106 countries.
“We have faced unprecedented economic headwinds, including significantly lower product demand and higher raw material and energy costs in the second half of 2022,” said Simon Turner, president and chief executive of Venator. “The agreement we have reached with our lenders on a recapitalisation plan will significantly reduce Venator’s debt burden and place the company on a sound financial footing, which will enable us to deliver on our strategy and capitalise on future growth opportunities.”
Venator's businesses are expected to continue to operate as normal for the duration of the Chapter 11 process and Venator expects to continue to pay wages and benefits to its global workforce and pay all trade partners.
Throughout the court-supervised bankruptcy process, Venator will remain in possession and control of its assets, as well as retain its existing management team and board of directors.
Venator expects to complete its Chapter 11 process within approximately two months.
Mr Turner concluded: “Venator’s management, alongside our advisers, has worked tirelessly to assess all viable options available to us to ensure the long-term sustainable success of the company.”
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