Solutia Declares Force Majeure on Certain Nylon Pr
St. Louis MO, October 10, 2005--Solutia Inc., a leading manufacturer and provider of performance films, specialty chemicals and an integrated family of nylon products, today announced that it has recently declared force majeure for certain products within its Integrated Nylon Division.
Hurricane Rita has caused raw material and utility supply limitations, and some of Solutia's suppliers have declared force majeure. The hurricane and supply limitations have impacted manufacturing operations throughout Solutia's Integrated Nylon Division. As a result of the supply limitations, Solutia is allocating available supply of certain products during the force majeure period.
Solutia has contacted customers and is actively managing the situation to mitigate the effects of this interruption in supply on its operations and customer deliveries. However, the duration of the force majeure period and the potential financial impact of this situation on the company are unknown at this time.
In order to alleviate the potential financial impact of this situation on its liquidity, Solutia will retain a portion of its net proceeds from the sale of Astaris LLC, its 50/50 joint venture with FMC Corporation, rather than using all of these proceeds to partially pay down the term loan portion of its debtor-in-possession (DIP) financing. As a result, Solutia anticipates it will be able to maintain liquidity consistent with levels experienced thus far during 2005. Closing of the Astaris sale is subject to various conditions and contingencies, including regulatory and Bankruptcy Court approval, all of which are expected to be satisfied by mid November.
