After almost four years, Solutia Inc. - a maker of plastic resin, film and fibers - expects to exit bankruptcy by the end of 2007.
``Through the bankruptcy process, we reshaped our portfolio of businesses and continued to invest,'' said Dan Jenkins, a spokesman for St. Louis-based Solutia, which ranks as North America's second-largest producer of nylon 6/6 resin.
After exiting bankruptcy, Solutia plans to relist its stock on the New York Stock Exchange. The firm will issue almost 60 million shares of stock, more than half of which will be owned by bondholders and unsecured creditors. A smaller portion of stock will be set aside for current stockholders and new investors.
The new stock is expected to be priced at about $20 per share. During the bankruptcy, Solutia's stock was sold over the counter and dropped as low as 12 cents per share. It was around 60 cents in late trading Oct. 10.
Solutia filed for Chapter 11 bankruptcy in December 2003, citing legacy liabilities - including environmental cleanup costs - that the firm inherited after being spun off from Monsanto Co. in 1997.
Annual sales at Solutia were $2.4 billion in 2003 but are expected to reach $3.8 billion this year. A good portion of that growth can be chalked up to this year's acquisition of Akzo Nobel NV's 50 percent stake in rubber chemical supplier Flexsys. The two firms had operated Flexsys as a 50-50 joint venture since 1995.
And after losing $316 million in 2004, Solutia was able to eke out a profit of $8 million in 2005 and $11 million for 2006. In 2007, the firm posted a first-half profit of $48 million. Solutia's employee count dropped from 6,300 to 6,100 during the bankruptcy, mainly through the sale of noncore businesses such as acrylic fiber.
Earlier this year, Solutia sold a water treatment chemicals business for almost $70 million. The firm also consolidated its nylon fiber production into a single site during 2005.
But Solutia continued to grow in other areas. The firm spent almost $20 million to buy out a partner's 51 percent share in Quimica M SA de CV, a maker of polyvinyl butyral interlayers in Puebla, Mexico. In nylon resin, Solutia added almost 160 million pounds of capacity earlier this year in Pensacola, Fla., by converting nylon staple fiber production.
``We recognized that our full integration of nylon resin at Pensacola and other sites in the Southeast is what makes us different,'' Jenkins said. ``That allows us to go from making carpet fiber for the North American market into making resin for a global market.''
Jenkins also credited a new management team that took over in 2004 with getting the firm back on track. Jeffry Quinn, who had been Solutia's general counsel and chief operating officer, replaced the retiring John Hunter in May of that year.
``That first year, 2004, was very difficult,'' Jenkins said. ``We were trying to figure out how to get through this. But by 2005, new management had brought in their own team that did a thorough analysis and decided how we needed to change.''