Vertellus Specialties, an Indianapolis-based global manufacturer of fine and specialty chemicals, has announced that Vertellus Specialties Inc., its parent company Vertellus Specialties Holding Corp., and its U.S.-based subsidiaries have filed voluntary Chapter 11 petitions in the United States Bankruptcy Court for the District of Delaware.
The step was taken as part of an agreement with the company’s existing term loan lenders, who are purchasing substantially all of Vertellus Specialties Inc.’s U.S. and international assets for $453.8 million. The filing includes all of the U.S.-based locations with the exception of the Vertellus SBH Business, which is owned by Vertellus Performance Chemicals (VPC) and the Vertellus Performance Chemicals plant in Elma, Washington. The filing does not include our international entities in Belgium the U.K., India and China, although these entities are included in the sale process.
“After evaluating a range of options to address the competitive and macroeconomic challenges facing our Agriculture and Nutrition business and the corresponding impact on our Company’s overall financial performance, it became clear that a sale of the Company through the Chapter 11 process was the best, most efficient means of creating a sustainable financial structure for our Company,” said Richard Preziotti, President and Chief Executive Officer. “We believe this is a positive outcome for our business, as well as our employees, customers and suppliers, because it allows us to significantly reduce our debt, realize the full benefits of the operational improvements we have already made and position our Company for future growth.”
Vertellus intends to continue normal operations in all of its plants and corporate offices throughout this process, ensuring its continued ability to fulfill customer orders as usual. To this end, the Company has secured a commitment from its existing lenders for $110 million of new debtor-in-possession financing to ensure continuity through the sale process. The Company also has filed motions on behalf of the U.S. businesses included in the Chapter 11 case that, once approved by the Bankruptcy Court, will allow these businesses to continue employee wages, medical benefits and other programs without interruption and to pay suppliers on a timely basis for all goods and services delivered on or after May 31, 2016. These motions are typical of the Chapter 11 process and are generally heard in the first days of the case.
Vertellus Specialties Inc.’s agreement with lenders serves as the “stalking horse” in this sale process under section 363 of the U.S. Bankruptcy Code through which Vertellus Specialties Inc. will evaluate any competing bids that may be submitted to ensure it receives the highest and best offer for its assets.
The Company expects to complete the sale process within the next three to four months and to be well positioned to more effectively compete – and succeed – in all parts of its business at the conclusion of the process.
Vertellus Specialties focuses on the manufacture of ingredients used in industries and market areas affected by trends favoring “green” technologies and chemistries. As a supplier to the plastics and polymers industry, the company’s Plastics business unit manufactures and markets functional additives and monomers, biobased and otherwise. For PLA, PHA and other bio-polymers, Vertellus Specialties Inc. offers plasticizer products, which are bio-based, bio-degradable and compostable, under the following trade names: Citroflex citric esters, FLEXRICIN ricinoleates plasticizers based on castor oil, PARACIN plasticizers based on hydroxystearic acid.