Solvay to split in two with implications for hybrid noteholders

Chicago, March 15 – Solvay is exploring a separation into two independent publicly listed companies, according to a press release.

The company is looking at creating a SpecialtyCo that would be a pure play specialty leader with accelerated growth potential and an EssentialCo that would be an essential chemicals leader with resilient cash generation.

SpecialtyCo would be comprised of the company’s currently reported materials segment, businesses that generated around €6 billion in net sales in 2021.

EssentialCo would take the company’s chemical segment as well as the special chem business, business that generated around €4.1 billion in net sales in 2021.

The company said that its current investment-grade rating is intended to be preserved until the separation.

SpecialtyCo would be committed to remaining investment grade.

The company would have full flexibility at the time of separating to fund its growth plan.

EssentialCo would “maintain a prudent financial policy to support cash generation,” according to the company.

Solvay would offer current dollar and euro senior and hybrid bondholders the option to be transferred to SpecialtyCo in due time.

The dividend at the outset is intended to be aligned with Solvay’s current level.

The transaction is expected to be completed in the second half of 2023.

Solvay is a Brussels-based chemical manufacturer.

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