Breaking News on Global Pharmaceutical Technology & Manufacturing

Interest relief helps Solutia struggle on

19-Jan-2004

Related topics: Contract services (outsourcing), Excipients, raw materials and intermediates, Regulatory & Safety

Chemicals and drug development company Solutia - forced to file for bankruptcy in the US last year in a bid to shake off liabilities to former parent Monsanto - has improved its financial position with a deal that trims $20 million (€16m) a year off its interest charges.

Solutia organised a debtor-in-possession loan of $525 million last month, but has been allowed to renegotiate the terms of the agreement. The new DIP loan, arranged by a syndicate headed by Citigroup, provides a $350 million loan to replace a bank facility Solutia arranged last year, as well as $175 million to fund continuing operations at the company.

Solutia has annual liabilities of around $100 million that date from before it was spun out of Monsanto in 1997. The liabilities include responsibility for lawsuit costs and Monsanto retiree healthcare expenses. Last month, Solutia's chief executive John Hunter said that the firm 'could not continue to sustain our operations' with such a burden.

 

Only the US operations of Solutia 's business - including 14 subsidiaries - are covered by the bankruptcy petition. The Pharmaceutical Services Division, based in Bubendorf in Switzerland, is unaffected.

 

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