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Chemical Finance Digest, Oct. 10-14
October 17, 2011 | By VINCENT VALK
Topping the headlines last week, DuPont has put Teijin Films, its polyester-film joint venture, and a power-based coatings unit, up for sale, according to a report in Bloomberg. The report says the businesses are likely to fetch less than $1 billion each.
In other M&A news, Thailand-based PTT Chemical has agreed to acquire a 50% stake in Cargill’s NatureWorks subsidiary, a PLA maker, for $150 million. NatureWorks is also planning a PLA plant in Thailand. Meanwhile, DuPont’s bid for Pannar, Africa’s largest seed firm, was rejected by South African antitrust authorities, and Lanxess acquired Unitex Chemical, a phthalate free plasticizer maker with $30 million in 2010 sales.
Earnings news was mixed last week. KMG Chemicals reported a 65% drop in net income due to raw material cost inflation and manufacturing consolidation costs. A. Schulman, however, said it expects profits to exceed prior guidance for the fiscal year ended August 31, with preliminary adjusted net income totaling $58 million, $6 million ahead of guidance.
In debt news, Clariant has issued €366 million ($506 million) in new bonds due in 2014 and 2016. The move comes after a separate refinancing in May, and is mostly aimed at pushing back maturities. Meanwhile, Moody’s has raised Mosaic’s senior unsecured credit rating to ‘Baa1’ from ‘Baa2,’ due to a strong balance sheet and favorable fertilizer pricing. The ratings agency also assigned a ‘B2’ corporate credit rating to BASF-Ineos styene joint venture Styrolution. The rating applies to Styrolution’s €480 million ($661 million) in bonds due 2016.
In macroeconomic news, U.S. consumer sentiment fell 1.9 points, to 57.5, in mid-October, according to the Rutgers/University of Michigan index. That’s “still at recessionary levels,” says IHS Global Insight economist Chris Christopher. On the (somewhat) plus side, business sales rose 0.3% year-on-year in August, “hardly robust, but not disastrous,” says IHS Global Insight economist Michael Montgomery.
The week ahead will see the U.S. housing starts report released on Wednesday. Starts fell 5% in August, and consensus is for 590,000 starts on an annualized basis.