By Liz White, UT editor
The Woodlands, Texas- Huntsman Corp. has completed the sale of its UK-based European commodity chemicals business to Saudi Basic Industries Corp. (SABIC), and is optimistic about selling its US commodities operation soon, said Peter Huntsman, president and ceo of Huntsman in a 29 Dec company statement.
SABIC paid a combination of cash plus the payment of pension liabilities for the European operations, with Huntsman receiving $685 million in cash. SABIC will take on $126 million in net pension liabilities, so that the total divestment value to Huntsman is $810 million.
"This transaction marks a significant milestone in our previously stated strategy to create additional shareholder value. Through positive operating cash flows, funds raised in our IPO, and the proceeds from this transaction and the previously completed sale of our US butadiene and MTBE business, the company has generated funds sufficient to reduce our net debt by $2600 million over the past two years. We now derive over 80 percent of our sales from our differentiated chemical products, which are significantly less cyclical, less energy dependent, and higher margin businesses than commodity chemicals," commented Peter Huntsman.
The group is moving towards selling its North American Polymers and Base Chemicals businesses, the Huntsman chief added. "Having received greater than anticipated interest from potential buyers, we now plan on making an announcement in the next few weeks," he revealed.
"Our ongoing execution of our strategy to dramatically reduce debt and focus on such differentiated businesses as the Textile Effects business acquired from Ciba earlier this year, provides the company with both a higher-margin portfolio of products and a much stronger balance sheet going forward," Peter Huntsman said.
Huntsman's Wilton-based aniline and nitrobenzene operations of its Polyurethanes division and its Teesside-based Pigments division, were not included in the SABIC transaction.
* Separately, Huntsman announced that Huntsman Chemical Co. Australia Pty Ltd (HCCA), a part of Huntsman's Base Chemicals and Polymers division, has completed the previously announced sale of its Polyester Resins (composites) business assets to Nuplex Industries Ltd for A$9.6 million ($7.5 million) in cash plus the value of inventory and other stock in trade at the completion date. This gives a total transaction value of A$20.3 million. "