US Huntsman to base pigments spinoff in UK

Source: ICIS News


HOUSTON (ICIS)--Huntsman plans to base its pigments spinoff in Stockton-On-Tees, UK, the US-based polyurethanes and epoxy-resins producer said on Friday.

The spinoff will include Huntsman's textile-effects business in addition to its pigments business.

The site of the headquarters is among the details that Huntsman revealed about the spinoff when it filed a form 10 registration statement with the US Securities and Exchange Commission (SEC).

CEO Peter HuntsmanIn the first quarter, Huntsman should choose a name for the company and establish its level of capitalisation.

The spinoff will have two classes of stock. Class A stock will be retained by Huntsman, giving it 19.9% of the spinoff's voting power.

The value of the actual stake still has not been determined, although this could be up to 40%, said Peter Huntsman, CEO of Huntsman. He made his comments during an earnings conference call.

Huntsman would like to have a stake because it expects more improvement in the market for titanium dioxide (TiO2), the main product of the spinoff, he said.

As Huntsman divests that stake, it will use the proceeds to pay down debt, said Kimo Esplin, the chief financial officer of Huntsman.

The company's Class B stock will be listed on the New York Stock Exchange (NYSE).

"Our goal with the spin-off is to create a Huntsman-type company," Huntsman said. "We won't overburden it with debt or abnormal environmental liabilities or other items that may jeopardise shareholder value. Ultimately, we think both companies will represent attractive investments, and the separation will unlock shareholder value."

The CEO will be Simon Turner, currently the division president of Huntsman's pigment business.

Kurt Ogden will be CFO of the spinoff. He is currently the vice president of investor relations.

The chief operating officer will be Rohit Aggarwal. He is currently the division president of Huntsman's textile-effects business.

The spinoff will operate 47 facilities, employ 7,500 people and sell to more than 100 countries. It will serve about 10,000 customers.

The spinoff's pigments and additives segment will have 28 plants in 10 countries with a total capacity of 1.3m tonnes/year.

This segment will produce TiO2 as well as colour pigments, functional additives, timber-treatment products and water-treatment chemicals.

The majority of the production will be TiO2, as its capacity will be 782,000 tonnes/year. This will place the spinoff among the three largest producers in the world, accounting for 11% of global capacity.

The company will also have 13 colour-pigment manufacturing and processing plants. These will make iron-oxide and other pigments.

It will have a functional additives facility in Europe. Functional additives include barium- and zinc-based inorganic chemicals used to make colours more brilliant, coatings shine, plastics more stable and protect products from fading.

The textile-effects segment will produce textile chemicals, dyes and digital inks.

SMALL IMAGE: CEO Peter Huntsman. (Photo by  Richard J Carsonto)
INSET IMAGE:  Paint brushes and white paint illustration. (Cultura/REX/Shutterstock)