Solutia & Monsanto JV serve the framework for Solutia's plan of reorganization
07 Jun '05
6 min read
Under the agreement-in-principle, the reorganized company will be an independent, publicly traded company. Solutia's secured debt and debtor-in- possession financing will be repaid in full from proceeds from an exit financing package to be arranged by the company to the extent that claims relating to such are allowed by the court.
In consideration for its contributions described above, the resolution of its claim, and the settlement of ongoing and potential litigation in the case, among other things, Monsanto will receive common stock in the reorganized company. If Monsanto is required to make the full new money investment contemplated by the rights offering due to its backstop commitment, Monsanto's equity interest in the reorganized company would be 52.5%.
The holders of allowed unsecured claims would receive the remaining 47.5% of the common stock in the reorganized company.
The ultimate equity ownership of both the holders of unsecured claims and Monsanto will be subject to adjustment based on the amount of allowed unsecured claims in the case. It is not contemplated that the holders of Solutia's existing equity will receive any distribution.
"Monsanto and the Unsecured Creditors' Committee and their respective advisors have been very constructive in working with the company to reach this agreement-in-principle," said Quinn. "We will continue to work with both of them and the other constituents in our case to concontinue to work with both of them and the other constituents in our case to confirm a plan of reorganization based on this agreement with the goal of emerging from Chapter 11 later this year."
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