Sterling sells pulp chems to Superior Propane for $375m
14 November 2002 02:24 [Source: ICIS news]
TORONTO (CNI)—Sterling Chemicals announced late Wednesday an agreement to sell its Toronto-based Sterling Pulp Chemicals (SPC) division to Canada’s Superior Propane Income Fund for $375m (Euro375m).
The agreement is subject to approval by the US Bankruptcy Court, Houston-based Sterling said in a statement, adding that the sale already had the support of Sterling’s major creditors.
Sterling’s president David Elkins said: "We believe the terms of the sale reflect the high quality of the business, its future prospects and its dedicated workforce. We are delighted that Superior Propane sees this acquisition as an important element in their overall growth strategy."
SPC has six manufacturing plants in North America. It is focused on sodium chlorate and sodium chlorite.
Sterling voluntarily filed for protection under chapter 11 of the US bankruptcy code in July last year.
In a separate statement, Superior Propane executive chairman Grant Billing, executive chairman said: "Sterling's bankruptcy was attributable to challenges experienced in other business segments and is not related to the pulp chemicals business being acquired by Superior."
He added that SPC "is ideally suited to income trust ownership" as it generates high levels of free cash flow.
Calgary, Alberta-based Superior Propane Income Fund owns Superior Propane Inc, Canada's largest distributor of propane and related products and services.
Superior will operate the newly acquired SPC business separately from its existing operations, it said.
By: Stefan Baumgarten
+1 713 525 2653
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