Company News

Huntsman pays off debts, reduces workforce and closes pigments plant
Having received the final payment of US$1 billion from affiliates of private equity firm Apollo Management, following the failed takeover deal with Hexion Specialty Chemicals, Huntsman says it will use some of the money to reduce its debts. In a move to reduce costs further, the company will axe 1,200 jobs by the end of the year, which represents 9% of its workforce, and reduce its full-time contractors by 490 positions. Together, these reductions will result in savings of US$150 million.

Meanwhile, Huntsman says it will continue its multi-billion dollar suit against Credit Suisse and Deutsche Bank for its failed takeover deal. A jury trial on those claims is set to begin on 11 May in Montgomery County, Texas. The company would expect the use of any proceeds resulting from the litigation against the banks to drive shareholder value through debt reduction, share repurchase or payment of an additional dividend.

Huntsman also announced that it will close its titanium dioxide plant located in Grimsby, UK, by the first quarter of 2009. The division’s oldest and least efficient pigments facility, it has an annual production capacity of 40,000 tonnes. The closure will affect 200 full-time employees and contractors and result in cost savings of US$28 million.

President/CEO Peter Huntsman also said that the company will reduce its 2009 capital expenditure to US$230 million, a reduction of US$190 million from the US$420 million spent last year. The US$340 million savings, combined with Apollo’s US$1 billion payment, will result in the company having a “strong balance sheet and significant liquidity”.