Exhibit 99.1
[Solutia logo] News
Solutia Inc.
575 Maryville Centre Drive
St. Louis, Missouri 63141
P.O. Box 66760
St. Louis, Missouri 63166-6760
FOR IMMEDIATE RELEASE
REORGANIZATION INFORMATION LINE: (800) 298-2303
REORGANIZATION WEBSITE: www.solutia.com/reorganization
MEDIA: Glenn Ruskin (314) 674-3804
EQUITY INVESTORS: Marleen Judge (314) 674-7777
DEBT INVESTORS: Kevin Wilson (314) 674-4905
SOLUTIA FINALIZES RESTRUCTURING OF EURO NOTES
ST. LOUIS, FEB. 3, 2004 --- Solutia Inc. (OTCPK: SOLUQ) announced today
that its subsidiary, Solutia Europe S.A./N.V., has successfully restructured
its 6.25% Euro Notes, due in 2005. The restructuring was completed as
planned on Jan. 30, 2004, at which time Solutia Europe and the requisite
Euro Note holders entered into definitive documents setting forth the terms
and conditions of the restructuring. The restructuring allows Solutia Europe
to continue normal operations while Solutia Inc. and its domestic
subsidiaries reorganize under Chapter 11 of the United States Bankruptcy
Code.
"We are pleased to have finalized the Euro Note restructuring, which is
beneficial for both the holders of the Euro Notes and for Solutia Europe,"
said Jeffry N. Quinn, senior vice president, general counsel and chief
restructuring officer, Solutia Inc. "By extending the maturity of the Euro
Notes, we have given ourselves time to finalize the reorganization of
Solutia Inc. and its domestic subsidiaries in the United States prior to the
maturity of the Euro Notes."
The Euro Notes were amended in the following manner in the
restructuring:
1. Elimination of the cross default provisions in the Euro Notes that
would have resulted in their default and acceleration upon the filing of a
Chapter 11 proceeding by Solutia Inc.
2. The maturity of the notes was extended to Dec. 15, 2008 from the
current Feb. 15, 2005 maturity.
3. Interest on the notes was fixed at the rate of 10% per annum,
payable semi annually.
4. Holders of the Euro Notes will be granted security interests in
substantially all of the assets of Solutia Europe S.A./N.V. and certain of
its subsidiaries (excluding Flexsys Holding BV), which subsidiaries will be
added as guarantors of the Euro Notes, all to the extent permitted under
applicable law and as further provided in the underlying documentation
implementing the restructuring.
5. Certain redemption provisions were added that allow partial
redemption of the Euro Notes as a result of permitted asset sales and full
redemption in certain circumstances. Full redemption is barred for 18
months; thereafter, full redemption is allowed at 105% of principal for the
next year, 103% of principal for the year thereafter, 101% of principal for
the year after that and at par thereafter.
6. Covenants were added that have the effect of limiting the ability of
Solutia Europe S.A./N.V. and its subsidiaries to transfer assets or cash out
of those entities until the Euro Notes are paid.
7. Solutia Europe S.A./N.V. agreed to certain financial reporting
requirements and to indemnify Euro Note holders against certain liabilities.
Solutia Europe and the holders of the Euro Notes also entered into an
Agreement of Understanding that sets forth, among other items, the process
for implementing the guarantees, security and pledges associated with the
restructuring. The finalization and implementation of the security and
pledges will take place over the course of the next several weeks.
# # #
FORWARD-LOOKING STATEMENTS
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
On Dec. 17, 2003, Solutia Inc., and 14 of its U.S. subsidiaries 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. Additional information on Solutia's Chapter 11
reorganization is available from the Company's web site, www.solutia.com.
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: 2/3/04