Unassociated Document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

  FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): April 30, 2010

Chemtura Corporation
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction  of incorporation)
  
1-15339
(Commission file number)
  
52-2183153
(IRS employer identification number)
 
1818 Market Street, Suite 3700, Philadelphia, Pennsylvania
199 Benson Road, Middlebury, Connecticut
   (Address of principal executive offices)
  
19103
06749
 (Zip Code)

(203) 573-2000
(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
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Item 2.01 Completion of Acquisition or Disposition of Assets

Chemtura Corporation (“Chemtura” or the “Company”) previously announced that on February 23, 2010, it had entered into a Share and Asset Purchase Agreement (the “SAPA”) with Galata Chemicals LLC (f/k/a Artek Aterian Holding Company, LLC), a Delaware limited liability company and its sponsors, Aterian Investment Partners Distressed Opportunities, LP, a Delaware limited partnership and Artek Surfin Chemicals Ltd., an Indian private limited company (collectively “Galata”).  As provided in the SAPA, Chemtura agreed, subject to Bankruptcy Court approval which approval was obtained on February 23, 2010, to sell its (i) ownership interest in Chemtura Vinyl Additives GmbH (“Chemtura Vinyl”) and (ii) certain assets used in the manufacture and distribution of tin and mixed metal stabilizers, organic based stabilizers, epoxidized soybean oil, liquid phosphate esters, chemical foaming agents and impact modifiers, and related intermediates of each of the foregoing, as engaged in by the Company at its Taft, Louisiana facility and by Chemtura Vinyl (collectively the “PVC Additives Business”) to Galata for, among other things, cash consideration of $16 million and the assumption by Galata of certain liabilities including certain pension obligations and environmental liabilities.  The purchase price is subject to a post-closing net working capital adjustment.  On April 30, 2010, pursuant to the terms of the SAPA, Chemtura completed the sale of its PVC Additives Business to Galata.

The foregoing description is qualified in its entirety by reference to the full text of the SAPA, which is attached as Exhibit 2.1 to the Company’s Current Report on Form 8-K, dated February 24, 2010 and incorporated herein by reference.

 Item 9.01. Financial Statements and Exhibits

(b)  Pro Forma Financial Information

The following Unaudited Pro Forma Condensed Consolidated Statements of Operations for the 2009, 2008 and 2007 fiscal years give effect to the sale of the PVC Additives Business as if it had been consummated as of the beginning of each respective period.  The Unaudited Pro Forma Consolidated Balance Sheet as of December 31, 2009 gives effect to the disposition transaction as if it occurred on December 31, 2009.

The unaudited pro forma condensed financial information is based upon the historical Consolidated Financial Statements and notes thereto and should be read in conjunction with the historical financial statements and the accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009, as amended.

Pro forma adjustments are based upon currently available information and certain estimates and assumptions, and, therefore, the actual results may differ from the pro forma results.  However, the Company believes that the assumptions provide a reasonable basis for presenting the significant effects of the transaction as contemplated, and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the pro forma financial information.

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CHEMTURA CORPORATION AND SUBSIDIARIES
(DEBTOR-IN-POSSESSION)
Pro Forma Condensed Consolidated Statement of Operations (Unaudited)
Year ended December 31, 2009
(In millions, except per share data)
 
   
As Reported
    
Adjustments (a)
    
Pro Forma
  
                   
Net sales
   $ 2,541     $ (241 )   $ 2,300  
                         
Cost of goods sold
     1,947       (226 )     1,721  
Selling, general and administrative
     293       (4 )     289  
Depreciation and amortization
     173       (11 )     162  
Research and development
     38       (3 )     35  
Facility closures, severance and related costs
     3       -       3  
Antitrust costs
     10       -       10  
Impairment of long-lived assets
     104       (65 )     39  
Changes in estimates related to expected allowable claims
     73       -       73  
                         
Operating loss
     (100 )     68       (32 )
Interest expense
     (70 )     -       (70 )
Other expense, net
     (17 )     -       (17 )
Reorganization items, net
     (97 )     -       (97 )
                         
Loss from continuing operations before income taxes
     (284 )     68       (216 )
Income tax provision
     (5 )     (5 )     (10 )
                         
Loss from continuing operations
   $ (289 )   $ 63     $ (226 )
                         
Basic and diluted per share information - attributable to Chemtura Corporation:
                        
Loss from continuing operations
   $ (1.19 )           $ (0.93 )
                         
Weighted average shares outstanding - Basic and Diluted
     242.9               242.9  
 
See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
 
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CHEMTURA CORPORATION AND SUBSIDIARIES
(DEBTOR-IN-POSSESSION)
Pro Forma Condensed Consolidated Statement of Operations (Unaudited)
Year ended December 31, 2008
 (In millions, except per share data)

   
As Reported
    
Adjustments (a)
    
Pro Forma
  
                   
Net sales
   $ 3,546     $ (392 )   $ 3,154  
                         
Cost of goods sold
     2,810       (373 )     2,437  
Selling, general and administrative
     332       (11 )     321  
Depreciation and amortization
     237       (16 )     221  
Research and development
     51       (5 )     46  
Facility closures, severance and related costs
     26       (3 )     23  
Antitrust costs
     12       -       12  
Loss on sale of business
     25       -       25  
Impairment of long-lived assets
     986       -       986  
Equity income
     (4 )     -       (4 )
                         
Operating loss
     (929 )     16       (913 )
Interest expense
     (78 )     -       (78 )
Other income, net
     9       -       9  
                         
Loss from continuing operations before income taxes
     (998 )     16       (982 )
Income tax benefit
     27       2       29  
                         
Loss from continuing operations
   $ (971 )   $ 18     $ (953 )
                         
Basic and diluted per share information - attributable to Chemtura Corporation:
                        
Loss from continuing operations
   $ (4.01 )           $ (3.94 )
                         
Weighted average shares outstanding - Basic and Diluted
     242.3               242.3  

See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
 
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CHEMTURA CORPORATION AND SUBSIDIARIES
(DEBTOR-IN-POSSESSION)
Pro Forma Condensed Consolidated Statement of Operations (Unaudited)
Year ended December 31, 2007
 (In millions, except per share data)

   
As Reported
    
Adjustments (a)
    
Pro Forma
  
                   
Net sales
   $ 3,747     $ (377 )   $ 3,370  
                         
Cost of goods sold
     2,883       (336 )     2,547  
Selling, general and administrative
     372       (13 )     359  
Depreciation and amortization
     269       (14 )     255  
Research and development
     62       (5 )     57  
Facility closures, severance and related costs
     36       (2 )     34  
Antitrust costs
     35       -       35  
Loss on sale of business
     15       -       15  
Impairment of long-lived assets
     19       -       19  
Equity income
     (3 )     -       (3 )
                         
Operating loss
     59       (7 )     52  
Interest expense
     (87 )     -       (87 )
Other expense, net
     (5 )     -       (5 )
                         
Loss from continuing operations before income taxes
     (33 )     (7 )     (40 )
Income tax provision
     (4 )     3       (1 )
                         
Loss from continuing operations
   $ (37 )   $ (4 )   $ (41 )
                         
Basic and diluted per share information - attributable to Chemtura Corporation:
                        
Loss from continuing operations
   $ (0.18 )           $ (0.20 )
                         
Weighted average shares outstanding - Basic and Diluted
     241.6               241.6  

See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
 
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CHEMTURA CORPORATION AND SUBSIDIARIES
(DEBTOR-IN-POSSESSION)
Pro Forma Consolidated Balance Sheet (unaudited)
December 31, 2009
(In millions, except per share data)

   
As Reported
    
Adjustments
      
Pro Forma
  
ASSETS
                    
                     
CURRENT ASSETS
                    
Cash and cash equivalents
   $ 236     $ 20  
 (b)
   $ 256  
Accounts receivable
     471       (29 )
 (c)
     442  
Inventories
     540       (51 )
 (c)
     489  
Other current assets
     230       (3 )
 (c)
     227  
                           
Total current assets
     1,477       (63 )       1,414  
                           
NON-CURRENT ASSETS
                          
Property, plant and equipment
     750       -         750  
Goodwill
     235       -         235  
Intangible assets, net
     474       -         474  
Other assets
     182       (2 )
 (c)
     180  
                           
    $ 3,118     $ (65 )     $ 3,053  
                           
LIABILITIES AND STOCKHOLDERS' EQUITY
                          
                           
CURRENT LIABILITIES
                          
Short-term borrowings
   $ 252     $ -       $ 252  
Accounts payable
     128       (2 )
 (c)
     126  
Accrued expenses
     184       (6 )
 (c)
     178  
Income taxes payable
     5       -         5  
                           
Total current liabilities
     569       (8 )       561  
                           
NON-CURRENT LIABILITIES
                          
Long-term debt
     3       -         3  
Pension and post-retirement health care liabilities
     173       (28 )
 (c)
     145  
Other liabilities
     199       (1 )
 (c)
     198  
Total liabilities not subject to compromise
     944       (37 )       907  
                           
LIABILITIES SUBJECT TO COMPROMISE
     2,002       -         2,002  
                           
STOCKHOLDERS' EQUITY
                          
Common stock - $0.01 par value
                          
Authorized - 500.0 shares
                          
Issued - 254.4 shares at December 31, 2009
     3       -         3  
Additional paid-in capital
     3,039       -         3,039  
Accumulated deficit
     (2,482 )     (10 )
 (d)
     (2,492 )
Accumulated other comprehensive loss
     (234 )     (18 )
 (e)
     (252 )
Treasury stock at cost - 11.5 shares
     (167 )     -         (167 )
Total Chemtura Corporation stockholders' equity
     159       (28 )       131  
                           
Non-controlling interest
     13       -         13  
Total stockholders' equity
     172       (28 )       144  
                           
    $ 3,118     $ (65 )     $ 3,053  

See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
 
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CHEMTURA CORPORATION AND SUBSIDIARIES
(DEBTOR-IN-POSSESSION)
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


(a)
Reflects the elimination of the results of operations of our PVC Additives Business.  These eliminations represent transactions directly attributable to the PVC Additives Business and do not include any corporate allocations of direct costs.  The adjustments for 2009 include a $65 million impairment charge related to property, plant and equipment and intangible assets directly related to the PVC Additives Business.
(b)
Represents estimated adjusted proceeds of $22 million less estimated direct transactional costs of $2 million.
(c)
Assets and liabilities to be transferred to Galata Chemicals LLC (f/k/a Artek Aterian Holding Company, LLC) and its sponsors, Aterian Investment Partners Distressed Opportunities, LP and Artek Surfin Chemicals Ltd. (collectively, “Galata”) in accordance with the share and asset purchase agreement, dated February 23, 2010.
(d)
Represents the estimated loss related to a hypothetical December 31, 2009 disposition of the PVC Additives Business. The actual gain or loss on the disposition will be based upon the net assets sold and final consideration determined as of April 30, 2010. The estimated loss as of December 31, 2009 was determined as follows:

 (in millions)
      
       
Base consideration
   $ 16  
Consideration for retained payables
     7  
Estimated working capital adjustment
     (1 )
Estimated adjusted proceeds
     22  
Net assets sold
     (48 )
Subtotal
     (26 )
Foreign currency translation gains and other
     18  
Estimated transaction costs
     (2 )
Estimated net loss on disposition
   $ (10 )

The estimated working capital adjustment is based upon working capital as of December 31, 2009.  The actual working capital adjustment will be based on the final working capital as of the April 30, 2010 closing date.  The tax effect on the loss on disposition was estimated to be less than $1 million.
(e)
Represents the accumulated other comprehensive income (primarily foreign currency translation adjustments) for the subsidiary transferred to Galata.


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Signatures

            Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


 
Chemtura Corporation
       (Registrant)
   
 
By:        /s/ Billie S. Flaherty
Name:   Billie S. Flaherty
Title:     SVP, General Counsel & Secretary

Date:
May 6, 2010


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