Monsanto to Buy Back $800 M in Shares, Could Incre

St. Louis, MO, October 31--The St. Louis Post-Dispatch reported that Monsanto Co. is generating sufficient cash to buy back up to $800 million of its common stock and cover liabilities related to the bankruptcy of Solutia Inc.,the new newspaper cited a report from by Fitch Ratings. Monsanto, announced the share-repurchase program Wednesday, saying it will make use of its strong cash flow and return value to shareholders. Fitch upgraded its outlook on about $1.74 billion of Monsanto's debt to "stable" from "negative." It also affirmed the agricultural-biotech company's "A-" senior unsecured and "F-2" short-term debt ratings, indicating they're a relatively low credit risk. Monsanto reduced its total debt load in fiscal 2005 compared to the previous year, despite spending about $1.5 billion on three acquisitions, exceeding Fitch's expectations, the report said. Fitch also was pleased that Monsanto reached an agreement that clarifies its liabilities in the bankruptcy reorganization of Solutia, which is based in Town and Country. The current Monsanto and Solutia each spun out of a common parent, the old Monsanto Co. As Solutia was created, it assumed responsibility for funding certain retiree benefits, environmental cleanups and related tort litigation, and Monsanto agreed to handle them if Solutia should become unable to do so. In a deal announced in June that is subject to bankruptcy court approval, Monsanto said it will contribute $284 million toward environmental and litigation costs and infuse Solutia with up to $250 million in exchange for equity. Monsanto could end up owning half of Solutia, and be required by accounting rules to consolidate Solutia's financials with its own. If that should happen, Fitch said, its pro forma credit profile still would be worthy of the current ratings.