MUMBAI (Reuters) – Huntsman Corp (HUN.N) plans to use the proceeds from its $1 billion settlement with Apollo Management over their failed merger to reduce debt and increase liquidity, the U.S. chemical maker said on Wednesday.
Last month, Huntsman Corp agreed to terminate its $6.5 billion agreement to be acquired by Apollo Management’s Hexion Specialty Chemicals Inc subsidiary. Apollo and its affiliates paid $1 billion to settle litigation with Huntsman.
The Hexion-Huntsman deal has been locked in legal battles for months. Apollo’s Hexion Specialty Chemicals unit had agreed to buy Huntsman in July 2007, but the deal faltered amid the credit crisis and legal battles.
Apollo and Hexion tried to walk away from the deal, citing insolvency concerns about the combined company.
Huntsman said it would continue its lawsuit against Credit Suisse (CSGN.VX) and Deutsche Bank (DBKGn.DE) in Texas. The company has argued that the banks conspired with Apollo and interfered with Huntsman’s prior merger pact with previous suitor Basell.
A jury trial on those claims is set to begin on May 11 in Montgomery County, Texas.
Huntsman said it had filed a motion to dismiss a lawsuit that had been pending in Texas state court in Montgomery County against Apollo and its affiliates.
Huntsman’s counterclaims against Hexion Specialty Chemicals, Apollo and its affiliates in the Delaware Court of Chancery have been stayed, pending the filing of a motion by the parties to dismiss all claims and appeals in that state.
The chemical maker also said it had received a payment of $40 million from certain reinsurers relating to a fire at a Texas facility that has since been divested.
Huntsman has also claimed about $235 million under its insurance policy for losses caused by the fire. The company said it anticipates filing additional claims as well.
Shares of Huntsman rose 7.7 percent to $3.78 in early New York Stock Exchange trade. (Reporting by Euan Rocha; Editing by Derek Caney)