Ashland eyes non-core divestitures to boost cash

02 December 2008 16:39  [Source: ICIS news]

TORONTO (ICIS news)--US specialty chemicals producer and distributor Ashland is looking to divest non-core assets to generate cash, CEO Jim O’Brien said on Tuesday.


The measures would come on top of cost savings, synergies and improved asset utilisation in the wake of Ashland’s acquisition of Hercules, O’Brien told analysts at a webcast investor event in New York.


“We would expect to use proceeds from any divestitures to enhance liquidity and provide financial flexibility,” he said.


In the current difficult market environment and after the completion of the Hercules deal Ashland was focused on three objectives, O’Brien said: operating safely, serving its customers and generating cash in the short term.


Among its business lines, the water chemicals business was likely best positioned to recover quickly, he added.


“I would expect the water business to improve dramatically this year, in spite of the economic environment,” he said.


Last month, the company cut its quarterly dividend to 7.5 cents from 27.5 cents to ensure it has enough cash available amid deteriorating and uncertain markets.


Credit agency Moody’s recently cut its ratings for Ashland due to weak third-quarter earnings and a $750m (€593m) bridge loan to finance the Hercules acquisition.


($1 = €0.79)


For more on Ashland visit ICIS company intelligence

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By: Stefan Baumgarten
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