Privately-held Vertellus Specialties and ten affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 16-11290. The filings do not include Vertellus Specialties’ international entities in Belgium, the U.K., India and China. Vertellus Performance Chemicals, which has separate financing agreements in place, is also not included in the Chapter 11 filings. The Company, which manufactures fine specialty chemicals, is represented by Stuart Brown of DLA Piper. The Company is wholly owned by Vertellus Specialties Holdings, which is wholly-owned by VSI Acquisition Corp.
The Company concurrently announced an agreement through which its existing term loan lenders would purchase substantially all of Vertellus Specialties’ U.S. and international assets for $453.8 million. The sale process includes the Company’s international affiliates; however, Vertellus Performance Chemicals is not included in the agreement with lenders and will remain under the ownership of Wind Point Partners. Vertellus Specialties’ agreement with lenders serves as the stalking horse bid in this sale process under Section 363 of the U.S. Bankruptcy Code, through which the Company will evaluate any competing bids that may be submitted to ensure it receives the highest and best offer for its assets.
According to a corporate release, “This agreement would provide long-term financial stability, allow the Company to maintain production at the highest standards for quality, safety and environmental responsibility, and give Vertellus Specialties Inc. the opportunity to implement its go-forward business strategy under the leadership of its existing management team.” Vertellus Specialties has secured a commitment from its existing lenders for $110 million of new debtor-in-possession financing to ensure continuity through the sale process. Richard Preziotti, president and C.E.O., comments, “After evaluating a range of options to address the competitive and macroeconomic challenges facing our Agriculture and Nutrition business and the corresponding impact on our Company’s overall financial performance, it became clear that a sale of the Company through the Chapter 11 process was the best, most efficient means of creating a sustainable financial structure for our Company.”
Vertellus Specialties’ Chapter 11 petition indicates assets between $100 and 500 million. Read more bankruptcy news.