Venator to enter Chapter 11
Venator Materials has announced that it has reached an agreement with “the overwhelming majority of its lenders and noteholders” on a recapitalisation plan. This will take the form of a prepackaged Chapter 11 process in the US, financed by a debtor-in-possession facility from its supporting creditors to provide liquidity throughout the process. President and CEO Simon Turner said that the agreement “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 capitalise on future growth opportunities”.
The company said that its business should continue to operate as normal for the duration of the process, which is expected to take about two months. It will continue to pay the workforce and trade partners. It will remain in control of its assets under the existing board and management team. Venator expects to be delisted by the New York Stock Exchange (NYSE), as is normal in these situations. Its common shares will continue to trade in the over-the-counter marketplace throughout the Chapter 11 process but are proposed to 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.