Huntsman to buy back $250 million in 7% convertibles for $382 million

By Devika Patel

Knoxville, Tenn., Jan. 11 - Huntsman Corp. said it will repurchase the entire $250 million of its 7% convertible notes due 2018 for approximately $382 million from funds controlled by Apollo Management, LP.

The convertibles were sold to Apollo in December 2008.

As a result of this repurchase, the company expects to record an approximately $146 million loss on early extinguishment of debt in the first quarter of 2010.

"As a result of our strong balance sheet and unique cash position, we are able to repurchase these notes prior to their maturity," Huntsman's president and chief executive officer Peter Huntsman said in a press release. "In addition to reducing our outstanding debt, this repurchase avoids the dilution of our shareholder base that would otherwise occur upon conversion of these notes, and demonstrates our confidence in the future of our business.

"The reduction of future interest expense, as well as the avoidance of additional shares, will make this transaction accretive to future earnings on a per share basis," he added. "Even after giving effect to this transaction, we will have ample liquidity, with more than $1.3 billion of cash plus access to unfunded revolver commitments and our accounts receivable securitization program."

Huntsman is a Salt Lake City, Utah-based manufacturer and marketer of differentiated chemicals.

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