US Ashland to further reduce costs, sell assets - CEO

30 April 2009 16:41  [Source: ICIS news]

HOUSTON (ICIS news)--US water-chemicals producer Ashland will continue tackling its debt by raising cash and cutting costs, including more divestments, CEO James O’Brien said during the company’s conference call on Thursday.

Following a first-quarter debt reduction of $206m (€155m), Ashland maintains $2.059bn in net debt, which the company will tackle in part through temporary shutdowns and divestments, O’Brien said.

The company anticipates additional temporary shutdowns of selected methylcellulose (MC) and carboxymethylcellulose (CMC) production lines, as well as previously announced permanent closures of performance-materials production facilities in Totowa, New Jersey, and Johnson Creek, Wisconsin.

Ashland executives did not specifically comment on market speculation that the company was prepared to divest its Valvoline motor oil business, as recently reported by the New York Post.

The New York Post report cited an anonymous source who said second-round bidding by multiple equity firms was set to begin.

However, the company said several non-strategic assets in the $100m-500m range were being reviewed for possible sale.

“We can’t have a business that is in review continue to be negotiated indefinitely,” O’Brien said, adding that several divestment options were on pace to be completed in the second quarter.

Closures previously announced for Ashland’s water-treatment business were expected to be finished by the end of the year.

Ashland shares traded at $22.30 as of 11:25 hours New York time (15:25 GMT) on the New York Stock Exchange, up 15.84%.

($1 = €0.75)

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By: Landon Feller
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