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Solutia gets court OK for $2 billion exit financing commitment
By Jennifer Lanning Drey
Portland, Ore. Nov. 20 - Solutia Inc. was granted verbal approval for its fully underwritten commitment for $2 billion of exit financing, during a hearing held Tuesday at the U.S. Bankruptcy Court for the Southern District of New York, according to Dan Jenkins, a company spokesperson.
As previously reported, Citi, Goldman Sachs and Deutsche Bank Securities Inc. are the joint lead arrangers and joint bookrunners for the exit financing.
Proceeds will be used to pay creditors under Solutia's plan of reorganization and to fund the ongoing operations of the company after its emergence from Chapter 11 bankruptcy, according to an October company news release.
Consistent with the terms of the company's disclosure statement, the exit financing package includes a $400 million senior secured asset-based revolving credit facility, a $1.2 billion senior secured term loan facility and a $400 million senior unsecured bridge facility.
In addition to the fully underwritten $2 billion exit financing package, Solutia has arranged for a fully backstopped rights offering that will raise $250 million in new equity capital.
Solutia said it will use the proceeds of the rights offering to fund retiree benefits and retained legacy liabilities.
The rights offering is backstopped by Highland Capital Management, UBS Securities, Longacre Fund Management, Southpaw Asset Management, Merrill Lynch Pierce Fenner & Smith Inc. and others.
A plan confirmation hearing is scheduled for Nov. 29, and Solutia said it expects to emerge from bankruptcy by the end of the year.
Solutia, a St. Louis-based manufacturer and provider of performance films, specialty chemicals and an integrated family of nylon products, filed for bankruptcy on Dec. 17, 2003. Its Chapter 11 case number is 03-17949.
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