TiO2 specialist Venator files for bankruptcy protection
LONDON (ICIS)–Titanium dioxide (TiO2) producer Venator has filed for Chapter 11 bankruptcy protection in the US after reaching an agreement with the majority of its shareholders for a recapitalisation plan, the UK-headquartered firm said on Monday.
The producer, which reported a $228m loss in the closing three months of 2022 on lower demand and higher costs, intends to recapitalise through the Chapter 11 filing, financed by a debtor-in-possession (DIP) financing facility, including a $275m commitment for fresh financing from its creditors.
If the plan receives US court approval it will be set to equitise “nearly all” of the company’s debt, Venator said in a statement on Monday.
“The agreement we have reached with our lenders on a recapitalisation plan will significantly reduce Venator’s debt burden,” said Venator CEO Simon Turner.
Venator has struggled to maintain competitiveness for an extended period, reporting a 41% year on year drop in TiO2 revenues in the fourth quarter of 2022 due to lower demand and currency headwinds, and projecting that conditions would deteriorate further during the first quarter 2023.
The company had suspended operations at its Duisberg, Germany, TiO2 plant in the fourth quarter, citing unsustainably low contribution margins. The company moved to restart the site in February, but noted that it may not be economically viable to continue production long-term.
“We have faced unprecedented economic headwinds, including significantly lower product demand and higher raw material and energy costs in the second half of 2022,” Turner added.
The company expects to remain in possession and control of its assets during the Chapter 11 process, with operations expected to continue as normal for the duration of the process.
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