Exhibit 99(a)
[Solutia Letterhead]
FOR IMMEDIATE RELEASE
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REORGANIZATION INFORMATION LINE: (800) 298-2303
REORGANIZATION WEBSITE: www.solutia.com/reorganization
MEDIA: Glenn Ruskin (314) 674-4078
EQUITY INVESTORS: Marleen Judge (314) 674-7777
DEBT INVESTORS: Kevin Wilson (314) 674-4905
SEEKING RELIEF FROM FORMER MONSANTO COMPANY LEGACY LIABILITIES,
SOLUTIA FILES VOLUNTARY PETITION FOR CHAPTER 11 REORGANIZATION
WORLDWIDE OPERATIONS CONTINUE WITHOUT INTERRUPTION
COMPANY OBTAINS COMMITMENT FOR $500 MILLION IN DEBTOR-IN-POSSESSION FINANCING
ST. LOUIS - DEC. 17, 2003 -- Solutia Inc. (NYSE:SOI), a leading
manufacturer and provider of performance films, specialty chemicals and an
integrated family of nylon products, announced today that it and 14 of its
U.S. subsidiaries have filed voluntary petitions for reorganization under
Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the
Southern District of New York. Solutia's affiliates outside the United
States were not included in the Chapter 11 filing. Solutia has approximately
6,700 employees worldwide.
During the Chapter 11 proceedings, Solutia's worldwide operations
will operate without interruption. The Company has taken steps to ensure
continued supply of goods and services to its customers. In that regard,
Solutia has received a commitment for up to $500 million in new
debtor-in-possession (DIP) financing, $350 million of which will replace
Solutia's current senior credit facility. Upon Court approval, the DIP
financing, combined with the Company's cash from operations, will provide
sufficient funding for operations during the
Chapter 11 process. Vendors will be paid in full for all goods furnished and
services provided after the filing date as required by the Bankruptcy Code.
The Company has requested Court approval to continue to pay employees
without disruption and in the same manner as before the filing, and expects
the request to be granted as part of the Court's "first day" orders.
The decision to file was made to obtain relief from the negative
impact on the Company caused by legacy liabilities, which include litigation
and settlement costs, environmental remediation and Monsanto retiree
healthcare obligations, Solutia was required to assume when the Company was
spun-off from the former Monsanto Company, which is now known as Pharmacia,
a wholly owned subsidiary of Pfizer. These legal liabilities have been an
obstacle to Solutia's financial stability and success. Under the U.S.
Bankruptcy Code, these liabilities will be discharged as pre-petition
liabilities pursuant to a plan of reorganization.
"Solutia has spent approximately $100 million each year to service
legacy liabilities that it was required to accept at the time of the
spin-off from Monsanto," said John C. Hunter, chairman, president and chief
executive officer of Solutia. "We have taken aggressive steps to offset
these legacy costs and strengthen our financial health by cutting more than
$100 million from our operating costs, working with Monsanto Corporation to
resolve the onerous Alabama PCB litigation, refinancing our credit facility
and beginning to restructure our broader debt portfolio. Concurrently, we
have made every effort to come to an out-of-court resolution with Monsanto
regarding these legacy liabilities. However, these negotiations have not
been successful.
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"We simply could not continue to sustain our operations burdened by
Monsanto's legacy liabilities, which, combined with the weakened state of
the chemical manufacturing sector, current economic conditions and the
continuing high energy and crude oil costs with unprecedented volatility,
has prevented us from realizing Solutia's true value," added Hunter.
"Today's action represents a significant step for Solutia, a turning point
that allows us to take control of our future. We believe that the Chapter 11
process will give us a forum to shed these burdensome liabilities and to
compete on a more level playing field with others in our industry.
"The protections afforded by Chapter 11 allow us to restore our
focus on operations, improve our balance sheet and realize the full value of
our businesses. In addition, the Company will be better positioned to
continue to provide its customers with the high quality products and
exceptional services they have grown to expect from Solutia.
"When we successfully emerge from Chapter 11, Solutia's employees,
customers, and vendors can look forward to a company that can grow and
compete successfully in its marketplaces," Mr. Hunter said. "We appreciate
the ongoing loyalty and support of our employees. Their dedication and hard
work are critical to our success and integral to the future of the Company.
I would also like to thank our customers, vendors and business partners for
their continued support during this process."
Additional information on Solutia's Chapter 11 reorganization is
available from the Company's web site, www.Solutia.com. The Company has also
set up a toll free Reorganization Information Line at 1-800-298-2303.
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FORWARD-LOOKING STATEMENT
This press release contains forward-looking statements.
Forward-looking statements are subject to known and unknown risks,
uncertainties and other factors that may cause actual results, performance
or achievements to be materially different from the future results,
performance or achievements expressed or implied by the forward-looking
statements. Assumptions and other important factors that could cause our
actual results to differ materially from those anticipated in our
forward-looking statements include, among other things: (i) the ability of
Solutia to develop, prosecute, confirm and consummate one or more Chapter 11
plans of reorganization; (ii) the potential adverse impact of the Chapter 11
filing on Solutia's operations, management and employees, and the risks
associated with operating businesses under Chapter 11 protection; (iii) the
ability of Solutia to comply with the terms of the DIP financing facility;
(iv) world economic conditions, competitive pressures, gain or loss of
significant customers, labor relations and disruption of operations, raw
material and energy costs, currency and interest rate fluctuations, success
in implementing pricing actions and managing spending, operating rates, cost
of debt, environmental compliance and remediation and other factors; (v)
customer response to the Chapter 11 filing; and (vi) the risk factors or
uncertainties listed from time to time in Solutia's filings with the
Securities and Exchange Commission and with the U.S. Bankruptcy Court in
connection with the Company's Chapter 11 filing. Other factors and
assumptions not identified above are also relevant to the forward-looking
statements, and if they prove incorrect, could also cause actual results to
differ materially from those projected.
CORPORATE PROFILE
Solutia (http://www.Solutia.com) uses world-class skills in applied
chemistry to create value-added solutions for customers, whose products
improve the lives of consumers every day. Solutia is a world leader in
performance films for laminated safety glass and after-market applications;
process development and scale-up services for pharmaceutical fine chemicals;
specialties such as water treatment chemicals, heat transfer fluids and
aviation hydraulic fluid and an integrated family of nylon products
including high-performance polymers and fibers.
Solutia ... Solutions for a Better Life.
Source: Solutia Inc.
St. Louis
Date 12/17/03
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