Credit agreement should boost US Rockwood – Deutsche Bank

22 June 2009 16:52  [Source: ICIS news]

HOUSTON (ICIS news)--US-based Rockwood Holdings’ amendment to its senior secured credit facility should allow the specialty chemical firm to better focus on running its business, research firm Deutsche Bank said on Monday.

In addition, the company’s business trends have stabilised, leading Deutsche Bank to reiterate its buy rating on Rockwood, the research firm said.

“With a major amendment to its bank facility completed, business trends stable and cost savings on track, we believe Rockwood has returned to a path that will lead to a premium specialty chemical multiple,” Deutsche Bank said.

Deutsche Bank also said it expected Rockwood to benefit from an increased emphasis on lithium-ion batteries for electric cars.

However, that would likely not result in material earnings contributions until 2013, the research firm said.

Deutsche Bank’s analysis was based on meetings hosted with Rockwood CEO Seifi Ghasemi and investors on the US west coast last week.

A Rockwood spokesman said the company would not comment on specific research notes.

Deutsche Bank set a 12-month target price for Rockwood at $20/share.

Rockwood traded at $13.69/share in early Monday trading on the New York Stock Exchange, down 7.5% on the day.

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By: Ben DuBose
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