ST. LOUIS, Feb. 14 /PRNewswire-FirstCall/ -- Monsanto Company said today that the reorganization plan filed by Solutia Inc. in its bankruptcy proceedings reflects the agreement in principle reached by Solutia, Monsanto and the Official Committee of Unsecured Creditors in June 2005.
"The plan filed today by Solutia, if approved by the court, is one that we are committed to, and that we believe is an important step forward in Solutia's ultimate emergence from bankruptcy," said Terry Crews, Monsanto Chief Financial Officer.
Key elements of the plan related to Monsanto include:
-- Monsanto and Solutia would each manage designated environmental
remediation programs, and Monsanto retains oversight with respect to
resolution of tort litigation claims. For its designated
responsibilities, Monsanto previously booked $284 million charge
recorded in the first quarter of fiscal year 2005.
-- A rights offering backed by Monsanto of up to $250 million would
provide funding for medical benefits for retirees assigned to Solutia
at the time of the spinoff in 1997 and certain pre-spin environmental
"Both Monsanto and Solutia worked hard to make sure the needs and concerns of the legacy retirees were met as fairly and equitably as possible in the reorganization plan," Crews said.
Monsanto's current fiscal year 2006 and 2007 cash flow guidance does not include the effect of any potential use of cash for the rights offering given that Solutia's reorganization plan must be approved by the bankruptcy court and the timing of such approval is uncertain. Monsanto's current guidance also does not reflect any equity in Solutia that the company may receive as a result of the bankruptcy process.
"Our goal has been to resolve the issues related to Solutia's bankruptcy to best protect Monsanto's shareowners interests while continuing to focus on our agricultural business," Crews said.
Solutia filed for Chapter 11 bankruptcy protection on Dec. 17, 2003. Solutia was formed in September 1997 when Pharmacia Corporation (now a subsidiary of Pfizer, Inc.), formerly known as Monsanto Company, spun off most of the chemical businesses to shareowners as an independent entity. Present- day Monsanto Company is focused on agriculture and was established by Pharmacia in 2000. At that time, Monsanto agreed to indemnify Pharmacia for certain liabilities assumed by Solutia at its spinoff to the extent that Solutia failed to pay, perform or discharge those liabilities.
Monsanto Company is a leading provider of technology-based solutions and agricultural products that improve farm productivity and food quality. For more information on Monsanto, see: http://www.monsanto.com.
CONTACT: Media, Lori Fisher, +1-314-694-8535, or Glynn Young, +1-314-694-3277, or Analysts, Scarlett Lee Foster, +1-314-694-3277, all of MonsantoCompany