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): MAY 16, 2007
SOLUTIA INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
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(STATE OF INCORPORATION)
001-13255 43-1781797
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(COMMISSION (IRS EMPLOYER
FILE NUMBER) IDENTIFICATION NO.)
575 MARYVILLE CENTRE DRIVE, P.O. BOX 66760, ST. LOUIS, MISSOURI 63166-6760
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(314) 674-1000
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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:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On December 17, 2003, Solutia Inc. ("Solutia") and its fourteen U.S.
subsidiaries (collectively, the "Debtors") filed voluntary petitions for
relief under Chapter 11 of title 11 of the United States Code (the "Bankruptcy
Code") in the United States Bankruptcy Court for the Southern District of New
York (the "Bankruptcy Court"). The Debtors' chapter 11 cases were consolidated
for the purpose of joint administration and were assigned the lead case number
03-17949 (PCB).
On May 18, 2007, the Bankruptcy Court entered an order (the "Sale
Order") approving Solutia's entry into an asset purchase agreement dated March
11, 2007 (the "Purchase Agreement"), by and between Solutia, a Delaware
corporation and Thermphos Trading GmbH, a Swiss corporation ("Thermphos") for
the sale of Solutia's Dequest(R) water treatment phosphonates business to
Thermphos and its affiliates. Solutia announced it had reached a definitive
agreement for the sale of the Dequest(R) business in a press release and Form
8-K filed on March 12, 2007.
The description of the Purchase Agreement contained herein sets forth
a brief summary of certain terms of the agreement that may be material to
Solutia. However this description does not purport to be complete and is
qualified in its entirety by reference to the specific terms of the Purchase
Agreement which will be filed upon closing of the Purchase Agreement.
The Purchase Agreement provides for the sale, assignment and transfer
from Solutia to Thermphos of all of Solutia's rights, title and interest to
the assets, other than certain excluded assets, exclusively used or held for
use in the Dequest(R) business, and for the assumption by Thermphos of
specified liabilities of Dequest(R). Certain liabilities including, but not
limited to, certain employee benefit and retiree obligations relating to the
Dequest(R) business will be retained by Solutia.
The sale price is $67 million, subject to adjustments for working
capital and inventory value as of the closing date. At closing, $2.5 million
of the sale proceeds will be placed into escrow for one year to secure
Solutia's indemnification obligations to Thermphos under the Purchase Agreement.
A portion of the net proceeds of the sale will be used to pay down the term
loan under Solutia's debtor-in-possession credit facility.
The Purchase Agreement includes an agreement by Solutia not to
compete in the business of production and sale of phosphonates and
phosphonate-based specialty additives and the purchase and resale of such
products for a period of three years following the closing date, except that
it may continue its Fluids Business (as defined in the Purchase Agreement).
The Purchase Agreement also includes an agreement by Thermphos not to hire nor
solicit any employees of Solutia or its affiliates for a period of two years
following the closing date.
Under the terms of the Purchase Agreement, Solutia is required to
indemnify, defend and hold harmless Thermphos and its affiliates from and
against any and all losses, damages and liabilities resulting from breaches of
the representations, warranties and covenants contained in the Purchase
Agreement or from any excluded liabilities. Under the terms of the Purchase
Agreement, Thermphos is required to defend, indemnify and hold harmless
Solutia and its affiliates from and against any and all losses, damages and
liabilities resulting from breaches of the representations, warranties and
covenants contained in the Purchase Agreement or from any assumed liabilities.
Closing of the Purchase Agreement is subject to a number of conditions,
including receipt of other required government and regulatory approvals as
well as customary closing conditions. The Purchase Agreement provides the
parties with customary termination rights relating to material adverse changes
or impossibility of conditions precedent to the closing.
ITEM 7.01. REGULATION FD DISCLOSURE
As previously announced in a press release by Solutia, on May 16,
2007, the Debtors filed with the Bankruptcy Court: (a) the Debtors' First
Amended Joint Plan of Reorganization pursuant to Chapter 11
of the Bankruptcy Code (the "Plan") and (b) the Debtors' First Amended
Disclosure Statement pursuant to Section 1125 of the Bankruptcy Code (the
"Disclosure Statement"). Copies of the Plan and Disclosure Statement, as filed
with the Bankruptcy Court, are furnished as Exhibits 99.1 and 99.2 hereto,
respectively. Also furnished herewith as Exhibit 99.3 is a copy of the press
release that Solutia issued on May 16, 2007 and furnished to the SEC on Form
8-K on that same date. Solutia is refurnishing such press release hereunder to
clarify that it corrected an earlier press release that Solutia issued on May
16, 2007 which earlier press release incorrectly stated the amount of the
anticipated enterprise value of reorganized Solutia as set forth in its Plan.
The correct amount is $2.85 billion.
Bankruptcy law does not permit solicitation of acceptances of the
Plan until the Bankruptcy Court approves the Disclosure Statement.
Accordingly, this announcement is not intended to be, nor should it be
construed as, a solicitation for a vote on the Plan. The Plan will become
effective only if it receives the requisite stakeholder approval and is
confirmed by the Bankruptcy Court.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits:
Exhibit No. Description
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99.1 Debtors' First Amended Joint Plan of Reorganization Pursuant
to Chapter 11 of the Bankruptcy Code
99.2 Debtors' First Amended Disclosure Statement Pursuant to
Section 1125 of the Bankruptcy Code
99.3 Press release dated May 16, 2007
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.
SOLUTIA INC.
/s/ Rosemary L. Klein
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Senior Vice President, General Counsel
and Secretary
DATE: May 22, 2007