British Columbia, Canada – FRX Innovations is selling its FRX Polymers business to a new entity, FRX Acquisition, as part of a restructuring. It is paying $1.5m in cash for the business, plus expenses and a €150m payment to a creditor. The sale includes the Nofia polymeric flame retardants.
Despite growing demand for Nofia, the business had been struggling. It determined that divesting FRX Polymers would be the most effective way of relieving its immediate financial pressures. Economic headwinds had been problematic, as was its inability to attract growth capital without first substantially restructuring its liabilities. The financial burden on FRX Polymers has been alleviated, it said, after working with creditors, suppliers and partners to find a way forward.
The group funding the purchase comprises several chemical industry investors and executives, and is expected to include two of its long-term shareholders, CCSRF Fireman (Cayman) Investment, and Ross Haghighat through Newburyport Partners. The new owners plan to build on the sustainable FR technologies the company has developed.
“This transaction is about much more than a transfer of assets, said FRX Innovations’ CEO Marc Lebel. “It’s a pivotal decision to address financial constraints head-on, realign FRX Innovations and focus our energies on what matters most – safeguarding long term shareholder value and setting a clear course for long-term stability.
He added that the capital structure of FRX required that an important portion of each fund raise be allocated to debt repayment as opposed to deploying funds to growth initiatives. “With a completely restructured balance sheet, FRX Polymers will be in a much more favourable position to accelerate its growth,” he said.
