Court approves Venator Chapter 11 plan

The US Bankruptcy Court for the Southern District of Texas has confirmed Venator Materials’ Plan of Reorganisation, ten weeks after the company filed for Chapter 11. Under this, it will complete a comprehensive restructuring that will see nearly all of its funded debt converted to equity while leaving trade obligations unimpaired.

“This important achievement allows us to move forward on a recapitalisation, which will significantly improve our financial footing, better enable us to deliver on our business plan and capitalise on future growth opportunities,” said president and CEO Simon Turner. Venator added that it expects to emerge from Chapter 11 in the coming weeks, following the receipt of certain regulatory approvals.  Proceeds from the exit financing envisaged under the plan are expected to fund this.

In May, Venator reached an agreement with “the overwhelming majority of its lenders and noteholders” on a recapitalisation plan. The company expected to be delisted by the New York Stock Exchange (NYSE), as is normal in these situations. Its common shares are continuing to trade in the over-the-counter marketplace throughout the Chapter 11 process but will be cancelled as part of the restructuring.

Since an IPO in August 2017, Venator’s share price has fallen by about 96% from a peak of $25.50 to less than $1. In November 2022, the company was warned that it faced delisting from the NYSE. As a result, investor J&T MS 1 SICAV publicly demanded a change of direction, describing Venator as “by far the worst financially performing TiO₂ producer – and one of the worst in the entire chemical sector”.

The company has addressed its problems by implementing a $50 million cost reduction programme, closing a $51 million sale-leaseback transaction for a site in its Color Pigments business and selling the iron oxide business for an enterprise value of $140 million.