Huntsman repays $2.61 billion of debt; balance sheet ‘strongest’ ever

By Devika Patel

Knoxville, Tenn., Feb. 23 – Huntsman Corp. has the strongest balance sheet in company history.

The company repaid $2.1 billion of debt in 2017 and paid off $511 million of term debt, using the “strong” free cash flow it generated during the year.

The company also expects to generate between $450 million and $650 million of free cash flow in the upcoming years.

“During 2017, we repaid approximately $2.1 billion of debt with $1.7 billion of net proceeds from the separation of Venator and with approximately $400 million from our free cash flow,” executive vice president and chief financial officer Sean Douglas said on the company’s fourth quarter and year ended Dec. 31 earnings conference call on Friday.

“We used [the $513 million of net proceeds from the sale of Venator shares] to pay in full $511 million of our term debt.

“We no longer have any secured term loans outstanding under our senior credit facilities,” Douglas said.

The company’s balance sheet has never been stronger.

“We have transformed our balance sheet, and we entered 2018 with it being the strongest it has been in Huntsman’s history,” Douglas said.

“We will continue to prioritize and maintain a strong balance sheet,” president and chief executive officer Peter Huntsman said on the call.

“With a stronger balance sheet, our focus will be to continue to invest in our operational reliability and organic growth,” Huntsman said in a press release.

The company generated $594 million of free cash flow in 2017.

“2017 was another strong year for free cash flow.

“We expect to generate between $450 million and $650 million of free cash flow in the upcoming years,” Huntsman said in the release.

For the fourth quarter, adjusted EBITDA was $360 million compared to $204 million in the prior year period and $340 million in the prior quarter.

Adjusted EBITDA was $1.26 billion for full year 2017 compared to $997 million in 2016.

As of year end 2017, the company’s net debt leverage ratio was 1.4x, compared to its net debt leverage ratio of 3.4x at the end of 2016.

During the fourth quarter, Huntsman generated adjusted free cash flow of $190 million compared to $133 for the same period in 2016.

As of Dec. 31, the company had $1.25 billion of combined cash and unused borrowing capacity compared to $1.21 billion as of Dec. 31, 2016.

Huntsman’s year-end liquidity was above $1.2 billion.

Huntsman is a specialty chemicals manufacturer based in the Woodlands, Texas.

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