Huntsman Sells Its Stake in Nova Chemicals

25 June 2001 00:00  [Source: ICB Americas]

Huntsman Corp. has sold its entire preferred equity stake in Nova Chemicals Corp. to the Bank of Nova Scotia and two other financial institutions for an undisclosed amount of cash.Nova originally issued $198 million of preferred convertible shares to Huntsman in December 1998 in connection with its acquisition of most of Huntsman's styrenics assets for $795 million. The preferred shares are convertible into a maximum of 8.5 million common shares of Nova, representing about 10 percent of its shares outstanding.We facilitated this transaction because we didn't want to dilute our common shares in the event Huntsman converted its preferred Nova securities into Nova common stock," says a Nova official.As part of the transaction, certain changes were made to the terms of the preferred shares. The market-based exchange rate at which the Nova preferred shares may be converted into Nova common shares will now be fixed on April 1, 2003. Nova will have the right to redeem those preferred shares after December 31, 2001 at a net cost of $191 million.

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