Huntsman plans to merge 2 subsidiaries

Salt Lake-based Huntsman Corp. on Friday said it plans to merge two of its subsidiaries, Huntsman LLC and Huntsman International.

The proposed merger must receive the approval of a majority of senior secured noteholders of Huntsman LLC. Those outstanding notes are valued at roughly $595 million, according to Don Olsen, Huntsman spokesman.

The merger, expected to be approved by September, will simplify the company's reporting and financing structure and allow for cost reductions in interest expense on its credit lines.

The two companies are financed as separate entities, and each has separate reporting requirements to the U.S. Securities and Exchange Commission.

"It will allow us to replace the existing credit facilities of Huntsman International and Huntsman LLC," Olsen said. "SEC reporting is a big part of it, but it will make governance easier as well, and more efficient."

Huntsman LLC is 100 percent owned by Huntsman Corp., while Huntsman International is 58 percent directly owned by Huntsman Corp.

Huntsman LLC consists of the company's North American assets. Huntsman International was formed in 1999 after the company purchased several businesses from Imperial Chemical Industries, based in the United Kingdom.

Regarding finances, Huntsman LLC carries a $715 million term loan due in 2010, plus a $60 million draw on a revolving credit line. Huntsman International holds a $1.2 billion term loan. Upon completion of the merger, Huntsman will seek to obtain a new secured credit line.

In February, Huntsman Corp. raised $1.45 billion in an initial public offering.

For the three months ended March 31, Huntsman reported a net loss of $56.4 million on revenue of $3.4 billion, compared to a net loss of $84.8 million on revenues of $2.6 billion for the same period in 2004.

At closing Friday on the New York Stock Exchange, shares of Huntsman were down 75 cents, or 3.7 percent, at $19.78. Since its IPO, Huntsman's shares have traded in a range of $18.15 to $30.00.

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