Middlebury, Connecticut, USA
December 17, 2009
Chemtura Corporation, debtor in possession, (Pink Sheets: CEMJQ) (the "Company" or "Chemtura"), today provided an update on its ongoing reorganization.
From the outset, Chemtura has viewed Chapter 11 as an opportunity to reshape the Company into a stronger, more nimble enterprise with a focus on growth. From an operating standpoint, Chemtura is pursuing growth opportunities while making significant progress in enhancing the efficiency and effectiveness of its businesses. Initiatives include:
- Increasing strategic investments to improve efficiency, such as its Enterprise Resource Planning (ERP) initiatives that have enabled over 90 percent of revenues to be managed on a single global instance of SAP and offering simplified and standardized business processes;
- Increasing investment in R&D, which is starting to result in important and innovative new product introductions such as GeobromTM, Weston(R) 705, and two new flame retardant products being produced today on pilot plant scale;
- Improving order processing to enhance responsiveness and delivery to customers;
- Transferring certain operations to third-party logistics providers, enabling the Company to maintain service levels at a more competitive cost;
- Growing its global antioxidant business with an additional expansion of its capacity at Gulf Stabilizer Industries (GSI),itsjoint venture facility in Al Jubail, Saudi Arabia; and
- Advancing in its joint venture between Al Zamil Group Holding Company and Chemtura Organometallics GmbH, a wholly owned German subsidiary of Chemtura Corporation, to build a world-scale metal alkyls manufacturing facility in Jubail Industrial City, Saudi Arabia.
In addition, Chemtura is meeting and exceeding its financial objectives. Accomplishments include:
- Generating positive cash flow over the last four quarters and accumulating substantial cash balances;
- Achieving and exceeding performance levels required by the Debtor-In-Possession Credit Agreement; and
- Identifying, and now working closely with, several financial institutions the Company expects will lead its exit financing. The support of these institutions will enable Chemtura to finance its Plan of Reorganization and emerge as a financially sound, stand-alone company.
The Company today also provided an update on its plans to emerge from Chapter 11 as soon as practicable.
As previously reported, more than 14,000 claims were received on or before the Bar Date of Oct. 30, 2009, many of which were contingent, unliquidated claims. While the Company has been working diligently to analyze and respond to these claims, it has concluded it should now proactively expand its exit timeline in order to fully evaluate and address these claims through the legal process. As a result, Chemtura's goal is now to emerge from Chapter 11 in the summer of 2010.
As described above, Chemtura has met numerous business milestones during the Chapter 11 cases, demonstrating operational credibility and maintaining an aggressive Chapter 11 timetable. Chemtura believes its actions and overall performance have helped gain the confidence of its customers and suppliers, as well as its creditors, and that the additional time allotted for the claims process will lead to a stronger company, better positioned to deliver superior service and financial results.
Since the beginning of this process, Chemtura has intended to develop a consensual Plan of Reorganization with as many of its stakeholders as possible. Chemtura continues to work collaboratively with its official committee of unsecured creditors in developing a Plan of Reorganization that is expected to include agreement on a substantial debt-to-equity conversion. The Company believes that this approach offers the quickest overall path to emergence while building a stronger, more focused and nimble enterprise, best equipped to grow and meet the needs of its customers.
Chemtura's operations outside the United States are not part of the Chapter 11 proceedings. These operations have been able to demonstrate financial strength and the ability to operate unaffected by the Chapter 11 process. These operations have virtually no third-party funded debt and have generated substantial cash flow during 2009, which they retain to fund operations and as a store of liquidity.
Chemtura appreciates the significant amount of support and encouragement it has received from all of its constituencies, which is critical to its success as each of these groups will play an important role in the future of the company.
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