31 December 2008 01:28 [Source: ICIS news]
HOUSTON (ICIS news)--Cash-strapped US specialty chemicals maker Chemtura has reached a waiver agreement with creditors to buy it more time to financially regroup, the company said on Tuesday.
Chemtura, which has already announced a substantial cost-cutting plan, said it expects to report an operating loss for the fourth quarter.
The company’s creditors have agreed to a 90-day waiver. The lenders reduced their credit facility commitments from $740m (€525m) to $500m, and received a grant of security in Chemtura’s ?xml:namespace>
Chemtura said it plans to reach a new credit arrangement with its lenders before the end of January.
"As the recession takes hold, the deterioration in business conditions has impacted Chemtura's financial performance and outlook,” said Chemtura president and CEO Craig Rogerson. “We are grateful for the support and prompt action by our lenders to address the immediate impact of these changes."
"The amendments and waivers provide Chemtura with the time we need to continue the orderly progress of our asset sales process and to implement actions to reduce our costs and manage cash flow,” Rogerson said.
“Further, we will have more clarity as to the underlying customer demand as their inventory reduction actions work through the global supply chain."
Chemtura said it saw order volumes decline sharply in November and December.
“These order reductions primarily related to Chemtura's Polymer Additives and Performance Specialties business segments in electronic, polyolefin, building and construction and general industrial applications,” the company said.
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