The Chapter 11 case also does not include Elma, Washington-based Vertellus Performance Chemicals, the legal entity containing the Company's sodium borohydride (SBH) business, which has separate financing agreements in place. Vertellus Performance Chemicals is not included in the agreement with lenders and will remain under the ownership of Wind Point Partners.
"After evaluating a range of options to address the competitive and macroeconomic challenges facing our Agriculture and Nutrition business and the corresponding impact on our Company's overall financial performance, it became clear that a sale of the Company through the Chapter 11 process was the best, most efficient means of creating a sustainable financial structure for our Company," said Richard Preziotti, President and Chief Executive Officer. "We believe this is a positive outcome for our business, as well as our employees, customers and suppliers, because it allows us to significantly reduce our debt, realize the full benefits of the operational improvements we have already made and position our Company for future growth."
Vertellus intends to continue normal operations in all of its plants and corporate offices throughout this process, ensuring its continued ability to fulfill customer orders as usual. To this end, the Company has secured a commitment from its existing lenders for $110 million of new debtor-in-possession financing to ensure continuity through the sale process. The Company also has filed motions on behalf of the U.S. businesses included in the Chapter 11 case that, once approved by the Bankruptcy Court, will allow these businesses to continue employee wages, medical benefits and other programs without interruption and to pay suppliers on a timely basis for all goods and services delivered on or after May 31, 2016. These motions are typical of the Chapter 11 process and are generally heard in the first days of the case.
Vertellus Specialties Inc.'s agreement with lenders serves as the "stalking horse" in this sale process under section 363 of the U.S. Bankruptcy Code through which Vertellus Specialties Inc. will evaluate any competing bids that may be submitted to ensure it receives the highest and best offer for its assets.
The Company expects to complete the sale process within the next three to four months and to be well positioned to more effectively compete – and succeed – in all parts of its business at the conclusion of the process.
Additional information can be found at www.VSRestructuring.com.
Vertellus is advised in this transaction by DLA Piper, Jefferies and FTI Consulting. The lenders are advised in this transaction by Milbank, Tweed and Moelis & Company.
Vertellus is a global specialty chemicals company focused on the manufacture of ingredients used in pharmaceuticals, personal care, nutrition, agriculture, and a host of other market areas affected by trends favoring "green" technologies and chemistries. Vertellus is the #1 global producer of pyridine and picolines, specialty pyridine derivatives, DEET, castor oil derivatives and systems, and a world leader in vitamin B3, citrate polymer additives and systems as well as a leader in custom manufacturing of agriculture and pharma intermediates and actives. Vertellus benefits from a technically advanced global manufacturing base and has over 1,000 employees. Vertellus is headquartered in Indianapolis, Indiana.
This press release (including information incorporated or deemed incorporated by reference herein) contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those involving future events and future results that are based on current expectations, estimates, forecasts, and projections as well as the current beliefs and assumptions of the Company's management. Words such as "guidance", "outlook", "believes", "expects", "appears", "may", "will", "should", "intend", "target", "projects", "estimates", "plans", "forecast", "is likely to", "anticipates", or the negative thereof or comparable terminology, are intended to identify such forward looking statements. Any statement that is not a historical fact and other estimates, projections, future trends and the outcome of events that have not yet occurred referenced in this press release, is a forward-looking statement. Forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore actual results may differ materially and adversely from those expressed in any forward-looking statements.
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SOURCE Vertellus Specialties Inc.