Solutia creditor, equity rights offerings fully subscribed

By Caroline Salls

Pittsburgh, Dec. 13 - Solutia Inc.'s creditor rights offering and equity rights offering have been fully subscribed, based on non-binding indications of interest, according to a company news release.

As previously reported, under the terms of the creditor rights offering, eligible creditors have been given the opportunity to purchase a share of up to 31% of the new common stock in reorganized Solutia for $13.33 per share.

Solutia said eligible creditors submitted total indications of interest, including over-subscription requests, of roughly $563 million of these rights, exceeding the $250 million of rights offered.

A total of $175 million of the $250 million of proceeds from the rights offering will be used to fund a Voluntary Employees' Beneficiary Association (VEBA) Retiree Trust to provide retiree welfare benefits for pre-spinoff Solutia retirees, and $75 million will be used to pay for other Solutia legacy liabilities.

Under the terms of the equity rights offering, eligible equity holders have been given the opportunity to purchase a share of up to 17% of the new common stock of reorganized Solutia for $17.23 per share.

According to the release, eligible equity holders submitted total indications of interest, including over-subscription requests, of $223.5 million of these rights, also exceeding the $175 million of rights offered.

The proceeds from the sale of this equity will fund an up to $175 million cash payment to Monsanto.

In addition, since the factor used to determine the equity rights available for purchase per stockholder under the equity rights offering should have been carried out to 0.0972 from 0.09, Solutia said eligible equity holders will be given an opportunity to subscribe for additional shares of new common stock.

If the full $175 million is raised through the equity rights offering, Monsanto will not hold an equity stake in Solutia upon the effective date of Solutia's plan of reorganization.

Solutia said it expects to send invoices to rights offering participants on Dec. 28, and payment in full will be due 10 days before the expected bankruptcy emergence date.

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 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 03-17949.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.