Wellman signs letter of intent to sell engineering resins business

By Caroline Salls

Pittsburgh, Sept. 29 - Wellman, Inc. has entered into a letter of intent to sell its engineering resins business and other assets located on its Johnsonville, S.C., site to an investor group that specializes in turnarounds and renewable energy businesses, according to a company news release.

Terms of the transaction were not disclosed, but Wellman said the deal is expected to close shortly after the completion of a definitive agreement and due diligence, as well as after bankruptcy court approval.

According to the release, the investor group includes JHW Greentree Capital, an affiliate of J.H. Whitney & Co., GarMark Partners and Westwind Equity Partners.

"The sale needs to proceed with urgency and is scheduled to close in the middle of October," Wellman chief executive officer Mark Ruday said in the release.

"During the sale process, Wellman expects to continue to service its customers.

"Wellman believes the sale is in its best interests and the best interests of its estates and its stakeholders and will bring in more value than a liquidation.

"More importantly, Wellman believes the sale would benefit the approximately 160 Johnsonville employees as well as the town of Johnsonville, its school system and its water treatment facility."

Robert Fotsch, who is expected to become the CEO of the Wellman-Johnsonville assets, said in the release, "Assuming we are able to complete the transaction, we plan to make the necessary investments and to support the high quality team in Johnsonville in order to reestablish Johnsonville's leadership in both engineering resins and recycled PET so that it remains a critical partner to companies in the automotive, bottling and other industries.

"Given the high cost of oil, the products produced at Wellman's Johnsonville's facility are a very attractive alternative to high priced virgin plastics."

Wellman, a Fort Mill, S.C., polyester products manufacturer, filed for bankruptcy on Feb. 22, 2008 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 08-10595.

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