Huntsman Corp. and its Huntsman Polymers Corp. unit have struck a deal that will reduce Huntsman's overall debt load by $700 million.
CSFB Global Opportunities Partners LP, a New York investment firm that holds about 82 percent of Salt Lake City-based Huntsman's corporate bonds, will exchange those bonds for an equity stake in a new holding company that will include Huntsman Corp. and most of Huntsman International Holdings, a separate unit that includes European polyurethane and titanium dioxide works.
Huntsman Polymers - an Odessa, Texas-based maker of polyethylene, polypropylene and specialty plastics - also will be included in the new holding company.
The size of Global Opportunities' stake of the new holding company has not been determined, Huntsman spokesman Don Olsen said. The Huntsman family will control ``at least 50.1 percent'' of the new entity, he said, and will continue to have operational and board control of Huntsman Corp., Huntsman Polymers and Huntsman International Holdings.
``We're not sacrificing any independence,'' Olsen said in a June 18 telephone interview. ``The company now will be stronger and on more solid footing and have more value than it's ever had.''
As part of the deal, Global Opportunities - a $2.2 billion fund that will separate from investment bank Credit Suisse First Boston in July - has acquired Imperial Chemical Industries plc's 30 percent debt and equity stake in Huntsman International for $430 million. The deal is to close in May.
That 30 percent will be placed in the new holding company, along with the 60 percent share that Huntsman Corp. already held. The remaining 10 percent of Huntsman International is owned by several banks and investment firms, Olsen said.
Global Opportunities also holds an 88 percent stake in Polymer Group Inc. of North Charleston, S.C., a maker of nonwoven and polyolefin-based products. Polymer Group had sales of about $816 million last year, but lost $248 million. The firm filed this year for protection under Chapter 11 of the U.S. Bankruptcy Code.
Huntsman Corp. and Huntsman Polymers each missed corporate debt payments late last year. But things appear to be picking up in 2002, with Huntsman Corp. reporting pretax profit of more than $50 million in the first quarter. It had lost $15 million in the same period in 2001.
Huntsman Corp. was founded in 1970 by Jon Huntsman as a maker of foam packaging. Last year, the firm posted sales of $8 billion.