Chemtura to Unload Dutch JV


Chemtura is seeking bankruptcy court approval to expedite sale of its share in a Dutch joint venture for $5 million to white oil producer Sonneborn B.V. If the sale goes through, Sonneborn would withdraw its bankruptcy court claim of $14.2 million in remediation costs, pension benefits costs and certain trade receivables.

According to court documents filed June 30, a hearing to approve the sale is scheduled for July 21.

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Chemturas and Sonneborns Dutch affiliates formed a 50-50 joint venture in 2005. Chemtura transferred production of certain specialty chemicals – including sodium sulfonates, oxidized petrolatums, barium sulfonates and calcium sulfonates – to Sonneborn that year, court documents state. Under contracts signed at the time, Chemtura would sell its interest in the joint venture to Sonneborn in 2013. Both companies have since agreed to expedite that sale.

Sonneborn manufactures sodium sulfonates and oxidated petrolatums at three Netherlands facilities and its Petrolia, Pa. plant. The chemicals remained part of Chemturas petroleum additive business, as the company retained sale and marketing of the chemicals.

In October 2009, Sonneborn filed a proof of claim against Chemtura alleging it was liable for $9.9 million in remediation costs, $4.2 million in pension benefits and $157,109 in trade receivables. If the proposed sale of Chemturas share of the sodium sulfonateand oxidized petrolatum joint venture is approved, court records indicate, then Sonneborn will assume those liabilities.

After months of discussions and negotiations, the documents stated, Chemtura and Sonneborn Holding on April 27 this year entered into a letter of intent establishing the framework for sale of the sodium sulfonates and oxidated petrolatum business to Sonneborn. According to the document, the parties then discussed and negotiated terms for the sale of the business, resulting in an asset purchase agreement dated June 29 to submit for bankruptcy court approval.

In its filing, Chemtura said the sodium sulfonate and oxidized petrolatums product lines provide detergency and corrosion protection and emulsification in metalworking fluids and antioxidants, which are widely used by customers in engine oils, gear oils and greases.

Middlebury, Conn.-based Chemtura did not respond to Lube Reports request for comment by deadline.

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