Solutia ask for court approval on sale of equipment at Alabama plants

By Reshmi Basu

New York, July 20 - Solutia Inc. requested approval of the sale of some of its equipment at two of its plants in Alabama, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The equipment, which is now idle, was used to manufacture chlorobenzene-based derivatives. In 2004, the company shut down the business because it had become unprofitable due to increased foreign competition.

Under the contract, the purchaser will buy the equipment for $2 million. The agreement also includes an $8 million prepaid rights access fee for the permission to upgrade the equipment.

In addition, Solutia will provide consulting services.

"This agreement addresses Solutia and the purchaser's desire to further explore and implement the establishment of chemical manufacturing operations" on additional sites, according to the motion.

"As a result, the arrangement greatly outweighs the de minimis amount of consideration Solutia could have obtained through the dismantling and sale of the chlorobenzene equipment."

The purchaser was not identified in the court filing.

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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