By: Frank Esposito
February 5, 2014
Specialty chemicals firm W.R. Grace & Co. has exited bankruptcy after almost 13 years.
Columbia, Md.-based Grace – which in October paid $500 million for Dow Chemical Co.'s polypropylene licensing and catalyst business – had filed for Chapter 11 bankruptcy in April 2001 because of asbestos-related liabilities.
At the time, Grace was a defendant in almost 66,000 asbestos-related lawsuits. Its corporate bankruptcy was one of the longest in U.S. history.
The firm's joint plan of reorganization took effect on Feb. 3. It establishes two independent trusts – funded with more than $4 billion in cash, stock warrants and other financial measures – to compensate asbestos personal injury claimants and property owners, company officials said in a Jan. 29 news release.
In a Feb. 4 report, analysts with Moody's Investors Service said that although it expects Grace to maintain strong margins and liquidity, the firm "still faces business challenges, such as shareholder demands to return cash."
Asbestos-related financial struggles led Grace to sell its Cryovac-brand plastic films business to Sealed Air Corp. in 1998. In last year's deal with Dow, Grace acquired a PP catalyst plant in Norco, La., as well as customer contracts, licenses, intellectual property and inventory.
On Wall Street, Grace's per-share stock price was under $70 in early 2013 but had improved to almost $96 in late trading Feb. 4.
Grace employs 6,500 worldwide and posted full-year sales of $3.2 billion in 2012.