Sterling Chem to get $60m under reorganisation plan

16 September 2002 17:00  [Source: ICIS news]

HOUSTON (CNI)--A private equity firm would provide $60m (Euro61.9m) in new equity for Sterling Chemical Holdings when the Houston-based company emerges from bankruptcy proceedings, the company said Monday.

The capital injection by Resurgence Asset Management was detailed in Sterling's second proposed plan of reorganisation with the company concentrating on Sterling's core petrochemicals business and selling its pulp chemicals business.

No one was immediately available Tuesday at Sterling's headquarters to answer questions about the announcement.

The company sought protection under Chapter 11 of the US bankruptcy code in July.

David Elkins, Sterling's president and co-chief executive officer, said the company's goal is to have the plan confirmed by year end.

He said in a statement: "The plan will help us achieve one of our primary objectives, which is to emerge from Chapter 11 with a much improved and viable capital structure."

Under the proposed plan, Sterling's petrochemicals business would be 87% owned by Resurgence and unsecured creditors who could invest up to $30m, 11.7% by the remaining unsecured creditors of Sterling and 1.3% by the holders of Sterling's 13 1/2% senior discount notes.

The interests of Sterling's current stockholders would be eliminated.

According to the new plan, proceeds from the sale of Sterling's pulp chemicals business would provide $80m of Sterling's exit financing requirements and repay Sterling's 12 3/8% senior secured notes due 2006.

Sterling said it would emerge from Chapter 11 "if and when" the plan receives creditor approvals and is confirmed by the bankruptcy court.

Based in White Plains, New York, Resurgence Asset Management is a global private investment firm with approximately $1.3bn in assets under management.

Sterling Chemicals is a holding company that manufactures petrochemicals, acrylic fibres and pulp chemicals.

By: Mike Sheridan
+1 713 525 2653

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