US Chemtura aims to emerge from bankruptcy in 2010

US specialty chemical company Chemtura plans to exit from Chapter 11 bankruptcy protection by next March, CEO Craig Rogerson said on Monday.

"We are optimistic we’re on track to exit bankruptcy by March 2010 – it is an aggressive timeline, but all parties are working towards this goal,” Rogerson said in an interview with ICIS.

It is an expensive proposition to be in bankruptcy,” he added, citing legal fees as well as an interest rate on its $400m (€280m) debtor-in-possession (DIP) credit facility amounting to around 18%.

Chemtura filed for bankruptcy protection for its US operations on 18 March, after reportedly failing to find buyers for its crop protection and petroleum additives businesses.

The company has already reached two important milestones in the bankruptcy process in recent weeks, Rogerson said.

This included submitting a five-year, long-range business plan to the unsecured creditors committee and establishing a deadline of 30 October for all parties to submit their claims.

"We spent lots of time on this, and the plan has been well received. This starts the valuation process where we can determine the value of the assets as well as all the liabilities,” Rogerson said.

The five-year plan assumes Chemtura continues to operate all its businesses, from crop protection to petroleum additives, plastic additives, urethanes and consumer cleaning products.

However, Rogerson did not take asset sales off the table.

"We’ll look at all ways to maximise stakeholder value, including divesting businesses. We will consider offers and evaluate them if they come,” he said.

Rogerson declined to comment on whether any businesses were up for sale.

ICIS reported that Chemtura had put its polyvinyl chloride (PVC) additives business on the selling block, according to sources in the financial community.

And while the crop protection and petroleum additives businesses had reportedly been for sale prior to Chemtura filing for bankruptcy, the rationale for any asset sales has now changed, Rogerson said.

"The rationale is different. Before, we were trying to sell to avoid bankruptcy, but now we would take a strategic perspective,” he said.

"Everyone knows our businesses and can make offers,” Rogerson added.
While individual businesses may be sold, a full-scale liquidation under Chapter 7 bankruptcy is very unlikely, Rogerson said.

"Chemtura is now generating cash. We filed for Chapter 11 – not so much because of profitability but because of liquidity issues, as debt was coming due and the banks weren’t lending,” he said.