Kraton cuts debt by $147 million, plans $500 million more by 2018

By Devika Patel

Knoxville, Tenn., Oct. 27 – Kraton Corp. plans additional debt reductions, with an expected net debt at year’s end of $1.6 billion and a further $500 million debt reduction by year-end 2018.

“Since the acquisition of Arizona Chemical, we have reduced net debt by $147 million and we expect to end the year with net debt of $1.6 billion,” president and chief executive officer Kevin M. Fogarty said on the company’s conference call announcing its third quarter earnings on Thursday.

“More importantly, by the end of 2018, we still expect to reduce Kraton net debt by $500 million from the $1.73 billion outstanding at the closing of the Arizona Chemical acquisition.

“We remain 100% focused on de-levering the balance sheet given the impressive cash flow profile of the combined company. We fully expect Kraton net debt at year’s end to be $1.6 billion and we remain committed to our goal of delivering $500 million debt reduction in Kraton by year end 2018,” Fogarty said.

“We have been successful in lowering Kraton debt from $1.73 billion at the date of the Arizona Chemical acquisition to $1.58 billion at Sept. 30. This represents more than a half a turn improvement in net leverage,” executive vice president and chief financial officer Stephen E. Tremblay added on the call.

Kraton is a Houston-based producer of engineered polymers and styrenic block copolymers.

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