Venator Materials, a manufacturer and marketer of chemical products, reached an agreement with the overwhelming majority of its lenders and noteholders on the terms of a comprehensive recapitalization plan. The agreement will equitize nearly all of the company’s funded debt, strengthen its balance sheet and facilitate an infusion of new capital.
The recapitalization will be implemented through a prepackaged Chapter 11 process in the United States and will be financed by a debtor-in-possession (DIP) financing facility, which includes a commitment for $275 million in new-money financing from the company’s supporting creditors. Following approval by the court, the DIP financing, together with cash on hand and cash generated from ongoing operations, is expected to provide substantial liquidity to support Venator throughout the recapitalization process and beyond.
Venator’s businesses are expected to continue to operate as normal for the duration of the process, and Venator expects to continue to pay wages and benefits to its global workforce and to pay all trade partners in the ordinary course. Throughout the court-supervised Chapter 11 process, Venator will remain in possession and control of its assets, retain its existing management team and board of directors and gain access to the array of tools available under Chapter 11 to position the company for long-term sustainable growth.
“The agreement we have reached with our lenders on a recapitalization plan will significantly reduce Venator’s debt burden and place the Company on a sound financial footing, which will enable us to deliver on our strategy and capitalize on future growth opportunities,” Simon Turner, president and CEO of Venator, said. “We have faced unprecedented economic headwinds, including significantly lower product demand and higher raw material and energy costs in the second half of 2022, but Venator’s management, alongside our advisors, has worked tirelessly to assess all viable options available to us to ensure the long-term sustainable success of the Company.”
Venator commenced solicitation for votes on its prepackaged Chapter 11 plan, and expects to complete its Chapter 11 process within approximately two months.
Venator expects to be delisted by the New York Stock Exchange in accordance with its rules. Venator common shares will, however, continue to trade in the over-the-counter marketplace throughout the duration of the Chapter 11 process. The shares are proposed to be cancelled as part of Venator’s restructuring.
In connection with the prepackaged Chapter 11 and recapitalization process, Venator is assisted by Moelis & Company and Kirkland & Ellis as respective financial and legal advisors, in addition to Alvarez & Marsal as operational advisor, and has asked the Court for authority to employ Epiq Corporate Restructuring as claims, noticing and solicitation agent.
