Solutia & Monsanto JV serve the framework for Solutia's plan of reorganization
07 Jun '05
6 min read
Leading performance films, specialty chemicals and an integrated family of nylon products manufacturer Solutia Inc announced it has reached an agreement-in-principle with Monsanto Company and the Official Committee of Unsecured Creditors in its Chapter 11 case regarding the restructuring of the company.
Agreement-In-Principle Provides Relief from Historic Liabilities; Strengthens Balance Sheet; Serves As Framework for Plan of Reorganization.
This agreement will serve as the framework for Solutia's Plan of Reorganization, which will contain the complete terms of the company's restructuring. Solutia anticipates filing its Plan of Reorganization and Disclosure Statement with the Bankruptcy Court later this summer.
"This agreement-in-principle is a major milestone in the successful reorganization of Solutia. It provides significant relief from the historic liabilities that were a driving factor in our Chapter 11 filing, reduces the risk profile of the company in terms of contingent liabilities, and strengthens our balance sheet," said Jeffry N. Quinn, president and CEO, Solutia Inc. "This agreement is in the best interests of Solutia, our employees, retirees and other stakeholders. In combination with the steps we continue to take to improve business performance and enhance our strategic and competitive position, this agreement provides a solid foundation for a reorganized Solutia that is positioned for success."
The agreement-in-principle provides for $250 million of new investment in reorganized Solutia. This investment will be in the form of a rights offering to unsecured creditors, who will be given the opportunity to purchase 22.7% of the common stock in the reorganized company.
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