Hexion Coatings and Composites plans new debt for separation

By Sara Rosenberg

New York, Sept. 29 – Hexion Coatings and Composites (US) Inc. (HCC) plans on getting about $400 million of new debt financing in connection with its separation into an independent company from Hexion Holdings Corp., according to an S-1 filed with the Securities and Exchange Commission on Wednesday.

Proceeds from the debt will be used by Hexion Holdings to repay a €300 million term loan.

Hexion Holdings anticipates that the HCC separation transaction will be in the form of a distribution of 100% of the stock of HCC to current holders of Hexion Holdings common stock and warrants. Upon completion of the HCC spinoff, current Hexion Holdings shareholders will own shares of both Hexion Holdings and HCC.

Closing is expected in the fourth quarter, subject to final approval by the board of directors, customary regulatory approvals and tax and legal considerations.

HCC is a supplier of epoxy resins and systems. Stafford, Tex., will serve as its primary U.S. office and the company will maintain an executive office in Shanghai. Hexion Holdings is a Columbus, Ohio-based supplier of adhesives and versatic acids and derivatives.

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