DuPont names new Performance Chemicals spinoff as Chemours

US chemical firm DuPont says the new public company to be created following completion of the pending separation of its Performance Chemicals segment will be named The Chemours Company. It has filed a registration statement for securities in the new company with the Securities & Exchange Commission. Chemours will be public-listed on the New York stock exchange as a global leader in titanium dioxide, fluoroproducts and chemical solutions. The name reflects a focus on the science of chemistry and the heritage of the Du Pont family origins in Nemours, France.

In connection with the redesign initiative, DuPont will record a pre-tax charge to earnings of about US$315 million in the fourth quarter 2014, comprising approximately US$160 million of employee separation costs, US$140 million of asset related charges and US$15 million of contract termination costs. The actions related to the fourth quarter charge are expected to be substantially complete by mid-2016 and will result in future cash payments of approximately US$175 million, primarily related to the payment of severance and related benefits.

Furthermore, as disclosed on June 26, 2014, the redesign initiative is expected to contribute at least US$1 billion in savings and DuPont will continue to identify additional areas of productivity across the organisation.

During the first nine months of last year, the unit to become Chemours earned US$430 million in pre-tax income on US$4.9 billion in revenues. Its biggest business is in white pigment titanium dioxide, and comprises 46% of sales. Fluoroproducts makes up another 36% of sales. The rest of Chemours’s businesses will reside in its chemicals solutions unit, which has large operations in sodium cyanide, sulphuric acid, aniline, and other chemicals.

DuPont announced its intentions to spin off these businesses back in 2013 as part of its strategy to focus on biotechnology, agriculture, electronic materials, and other high growth areas. DuPont, earlier in 2013, also sold its performance coatings business to equity firm, Carlyle Group, for US$4.9 billion in cash. Moreover, the company put up its glass laminating solutions and vinyl business for sale in November 2013. The business is a part of its Packaging & Industrial Polymers unit.

Chemours will be led by CEO Mark P. Vergnano who is well acquainted with its business. Since 2009, he ran the TiO2, fluoroproducts, and chemicals units for DuPont. The registration statement says Chemours’s strategy will be to pursue organic growth, primarily through capacity expansions, as well as to penetrate developing markets.

The company is targeting a high-yield credit rating of BB and will be spun off with a “commensurate debt level.” This implies, given Chemours’s strong cash flow position, that Chemours will spin off with an ample amount of debt.

The separation of Chemours from DuPont remains on track to be completed by mid-2015.

Chemours will have approximately 9,100 employees, 37 production facilities in 12 countries, and will serve over 5,000 customers worldwide.


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