Solutia shareholder Harbinger to sell up to 6.5 million shares

By Lisa Kerner

Charlotte, N.C., June 17 - Solutia Inc. shareholders Harbinger Capital Partners Master Fund I, Ltd. and Harbinger Capital Partners Special Situation Fund, LP are collectively selling up to 6.5 million shares of their Solutia common stock alongside the company's public offering of up to 18.5 million shares of new common stock.

Proceeds from the Harbinger sale will not go to Solutia.

Solutia said proceeds from its part of the offering will be used to fully repay the company's $74 million German term loan and for general corporate purposes.

Jefferies & Co., Inc., the bookrunner for the transaction, will have an option to purchase up to an additional 15% of the total offered amount of common stock to cover over-allotments, if any, within 30 days, the release said.

As previously reported in May, Solutia said it was comfortable with its liquidity position following the closing the German term loan but believed a soft sales environment and step-down in its leverage covenant will reduce its cushion later in the year.

Solutia is a St. Louis-based performance materials and specialty chemicals company.

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