Middlebury, Connecticut -- Chemtura Corp. has agreed an amendment and waiver with lenders under its senior credit facility, as well as with the providers of its US accounts-receivable securitisation facility. The company also said 20 Dec that it intends to replace this latter facility before the end of January 2009.
"As the recession takes hold, the deterioration in business conditions has impacted Chemtura's financial performance and outlook. We are grateful for the support and prompt action by our lenders to address the immediate impact of these changes," said Craig Rogerson, chairman, president and ceo, in the statement.
Rogerson explained that, "The amendments and waivers provide Chemtura with the time we need to continue the orderly progress of our asset sales process and to implement actions to reduce our costs and manage cash flow. Further, we will have more clarity as to the underlying customer demand as their inventory-reduction actions work through the global supply chain."
Chemtura said that along with other companies, it has seen order volumes "decline sharply in November and December as its customers experienced, or anticipated, reductions in demand from the industries they serve."
These lower orders primarily affect Chemtura's Polymer Additives and Performance Specialties business segments in electronic, polyolefin, building and construction and general industrial applications. These businesses include the group's polyurethane prepolymers and its major flame-retardants operations.
As a result, Chemtura expects to report an operating loss for the fourth quarter 2008. In light of this deterioration in financial performance, lenders have granted a 90-day waiver of its compliance with the financial maintenance covenants under its senior credit facility.
The amendment and waiver agreement with the lenders under its senior credit facility required, among other matters, a permanent reduction in the facility commitments from $740 million to $500 million.