PolyOne sells stake in Oxy Vinyls, LP for $261 million

07 July 2007

Leading global provider of specialised polymer materials, services and solutions, PolyOne Corporation, today announced having sold its 24-per cent interest in Oxy Vinyls, LP (OxyVinyls) to Occidental Chemical Corporation (OxyChem), a wholly owned subsidiary of Occidental Petroleum Corporation.

Under the terms of the agreement, PolyOne will receive cash proceeds of $261 million for the sale of its 24 per cent interest in OxyVinyls.

PolyOne says that it will immediately use the proceeds to reduce debt, including the entire outstanding balance of $141.37 million in aggregate principal amount of its 10.625 per cent ''senior notes'' due in 2010. As a result, the company has projected lower interest costs of approximately $25 million in 2008 compared to 2006.

PolyOne will retain the existing polyvinyl chloride (PVC) resin and vinyl chloride monomer (VCM) supply agreements that it entered into when OxyVinyls was formed.

The terms of the supply agreements, including extensions, run through 2024. These agreements ensure consistent, cost-effective raw material supplies that will enable PolyOne to maintain its competitiveness and pursue its strategy of providing value-creating material and service solutions to its customers.

In a related transaction, PolyOne will acquire OxyChem''s 10 per cent interest in PVC Powder Blends, LP for $11 million, which will bring PolyOne''s ownership of this PVC compounding operation to 100 per cent.