Solutia Provides Update Regarding Chapter 11 Emergence and Exit Financing
Wednesday January 23, 9:12 am ET
ST. LOUIS, Jan. 23, 2008 (PRIME NEWSWIRE) -- Solutia Inc. (NYSE:SOA) announced today that the effective date of its confirmed plan of reorganization and its emergence from Chapter 11 will be delayed from the previously anticipated January 25, 2008, emergence date.
As previously disclosed, Solutia's plan of reorganization, which was confirmed on November 29, 2007, is subject to numerous closing conditions, including entering into an exit financing facility. The lead arrangers of Solutia's exit financing -- Citigroup Global Markets Inc. and certain of its affiliates, Goldman Sachs Credit Partners L.P., Deutsche Bank Trust Company Americas and Deutsche Bank Securities Inc. -- informed Solutia yesterday that, in their view, due to continuing conditions in the credit markets, they have not been able to complete the exit financing they committed to on October 25, 2007. This exit financing consists of a $1.2 billion senior secured term loan facility, a $400 million senior secured asset-based revolving credit facility and $400 million aggregate principal amount of senior unsecured notes.
Under the terms of the commitment, the lead arrangers of the exit financing have an obligation, subject to certain conditions, to provide the term loan facility, the revolving credit facility and, in case they are not able to successfully market the senior unsecured notes, a $400 million senior unsecured bridge facility. The commitment expires on February 29, 2008. One of the conditions of the lead arrangers' obligations to provide these credit facilities is the absence of any adverse change since October 25, 2007 in the loan syndication, financial or capital markets generally that, in their reasonable judgment, materially impairs syndication of the proposed loan facilities. The lead arrangers have asserted that this condition has not been satisfied.
Solutia, however, believes that the ongoing conditions in the credit markets began long before October 25, 2007. Accordingly, Solutia believes that the lead arrangers are required to fund their commitments on or before February 29, 2008.
Jeffry N. Quinn, the Chairman, President and Chief Executive Officer of Solutia, said, ``While we disagree with the position asserted by the lead arrangers, we intend to continue to work with them to successfully syndicate the exit facility.''
Source: Solutia, Inc.
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