Activist investors scupper USD20 billion Clariant-Huntsman merger

MOSCOW (MRC) -- Swiss specialty chemicals maker Clariant and U.S. group Huntsman abandoned their USD20 billion merger, notching a win for activist investors who fought the deal for months on the grounds it would destroy shareholder value, said Reuters.

White Tale, the investment vehicle of hedge fund manager Keith Meister and New York-based fund 40 North, had raised its Clariant stake to above 20 percent, Reuters reported on Thursday ahead of the announcement the tie-up was dead. White Tale’s rising stake, coupled with other Clariant shareholders who came out against the deal, left the Swiss company doubtful of mustering the two-thirds support necessary for the merger to go through.

The successful revolt comes amid a wave of investor activism in Switzerland, where Credit Suisse and Nestle both face demands for change. Chief Executive Hariolf Kottmann said Clariant still had options to explore after further talks with White Tale, which had so far not presented the company with an alternative plan.

"To do a merger of equals ... is one option, to make a large transformational transaction is another option, to continue to stand alone is a third option," Kottmann told reporters on a call where he vowed to remain CEO. Some analysts said Clariant could become a bid target, though its shares fell about 5 percent on Friday.

"Clariant is again the No. 1 takeover target," said Baader Helvea analyst Markus Mayer, who said bidders might wait until Clariant’s share price fell further, or to see if White Tale could install management more favorable to a takeover.

The collapse of the merger also poses a challenge for Huntsman’s founding family, which was set to hold a significant stake in the combined entity but could now struggle to play a role in a consolidating industry without losing influence. Clariant and Huntsman in May struck an agreement that would have given Clariant 52 percent of the combined entity, saying the deal would produce around USD400 million in annual cost synergies and create the world’s second-biggest specialty chemicals maker behind Evonik.

In fighting the Huntsman tie-up, Meister and 40 North’s David Winter and David Millstone contended the merger would not deliver enough benefits, while exposing Clariant to Huntsman’s debt and volatile commodity chemicals business. Speculation the deal might fail had been mounting as even supporters sold down their stakes. "I thought it was a fantastic deal," said one investor, who sold out on fears White Tale was gaining the upper hand. "I think White Tale want something more short term."
MRC

MOSCOW (MRC) -- CB&I has announced it has been selected by HPCL Mittal Energy Ltd. (HMEL) for the license and basic engineering of a 1,200 KTA mixed feeds ethylene plant for the Guru Gobind Singh refinery in Bathinda, India, as per Hydrocarbonprocessing.

The plant has the capability of being expanded to 1,500 KTA. The scope of work includes recovering refinery offgas and integration with the ethylene plant, pyrolosis gasoline hydrogenation and detailed engineering for CB&I's proprietary highly selective Short Residence Time (SRT) VII cracking heaters.

"During the last 30 years, CB&I has licensed 44% of the world's ethylene production," said Daniel M. McCarthy, CB&I's Executive Vice President of Technology. "This award demonstrates HMEL's confidence in our technology, engineering solutions and commercial experience."

As MRC informed earlier, in March 2017, CB&I announced it had been awarded a substantial contract for the license, engineering design and catalyst supply for five proprietary technologies to be used in an integrated refining and petrochemical project in China. The complex will use BP Paraxylene OPEX advantaged crystallization technology exclusively licensed by CB&I, as well as technology for a vacuum gasoil hydrocracker, diesel hydrocracker, kerosene hydrotreater and delayed coker offered through Chevron Lummus Global (CLG). CLG is a JV between Chevron and CB&I.
MRC

MOSCOW (MRC) — Tankers carrying record levels of crude are leaving in droves from Texas and Louisiana ports, and more growth in the fledgling US oil export market may before long test the limits of infrastructure like pipelines, dock space and ship traffic, said Hydrocarbonprocessing.

US crude exports have boomed since the decades-old ban was lifted less than 2 yr ago, with shipments recently hitting a record of 2 MMbbl a day. But shippers and traders fear the rising trend is not sustainable, and if limits are hit, it could pressure the price of US oil.

How much crude the United States can export is a mystery. Most terminal operators and companies will not disclose capacity, and federal agencies like the US Energy Department do not track it. Still, oil export infrastructure will probably need further investment in coming years. Bottlenecks would hit not only storage and loading capacity, but also factors such as pipeline connectivity and shipping traffic.

Analysts believe operators will start to run into bottlenecks if exports rise to 3.5 MMbpd to 4 MMbpd. RBC Capital analysts put the figure lower, around 3.2 MMbpd. The United States has not come close to that yet. A total of the highest loading days across Houston, Port Arthur, Corpus Christi and St. James/New Orleans—the primary places where crude can be exported—comes to about 3.2 MMbpd, according to Kpler, a cargo tracking service.

But with total US crude production currently at 9.5 MMbpd and expected to add 800,000 bpd to 1 MMbpd annually, export capacity could be tested before long. Over the past four weeks, exports averaged 1.7 MMbpd, more than triple a year earlier. "Right now, there seems to be a little more wiggle room for export levels," said Michael Cohen, head of energy markets research at Barclays.

"Two to three years down the road, if US production continues to grow like current levels, the market will eventually signal that more infrastructure is needed. But I don't think a lot of those plans are in place right now." If exports do hit a bottleneck, it would put a ceiling on how much oil shippers get out of the country. Growing domestic oil production and limited export avenues could sink US crude prices.

Shippers have booked vessels to go overseas in recent weeks because the premium for global benchmark Brent crude widened to as much as USD7 a barrel over US crude, making exports more profitable for domestic producers.
MRC

MOSCOW (MRC) -- Shandong Shenda Chemical is likely to brought on-stream its polypropylene (PP) plant, according to Apic-online.

A Polymerupdate source in China informed that the company has planned to complete maintenance at the plant in mid-November 2017. The plant was taken off-line for trunraround on October 5, 2017.

Located in Shandong, China, the plant has a production capacity of 200,000 mt/year.

We remind that, as MRC informed earlier, in mid-May 2017, another major petrochemcial producer in China - Sinopec Yangzi Petrochemical - took off-stream its PP plant. The duration of the planned shutdown could not be ascertained. Located in Jiangsu province, China, the plant comprising three units, which have a production capacity of 200,000 mt/year, 100,000 mt/year and 100,000 mt/year.

Shandong Shenda Chemical Engineering Co., Ltd. is part of Levima Group Co. It started production in February 2014. The company incorporated another subsidiary of Levima Group - Shandong Haoda Chemical Engineering Co., Ltd. - on 25 January 2016.
MRC

MOSCOW (MRC) -- Italian plastics multinational Mossi Ghisolfi has attracted interest from a series of buyers, including plastics maker Indorama, for its US assets placed under Chapter 11 restructuring, reported Reuters with reference to sources close to the situation.

The assets, which include one of the world's largest plastic bottle production plant projects, could fetch up to USD1 B, though a sale could take some time, one of the sources said.

Rothschild is running the proceedings, the sources said.

Mossi Ghisolfi, founded by the Ghisolfi family in 1953, is famous for introducing PET, a plastic used for soft drink bottles, in Italy and across Europe.

In 2013, it considered listing its M&G Chemicals business in Hong Kong but then pulled plans as market conditions worsened.

The unexpected death of former managing director Guido Ghisolfi in 2015 and big cost overruns at its Corpus Christi PET plant in the United States have hit business.

Last year, M&G Finanziaria, the holding company owned by the Ghisolfi family, had a 90% fall in operating profits to 6.9 MM euros (USD8 MM) on revenues of 1.7 B euros. Debt stood at around EUR2.5 B.

"Indorama, Reliance Industries and Alpek are interested," one of the sources said. The source said no Chinese names had expressed interest since they preferred to build their own plants at home.

Another source said the replacement value of the company's US assets, or what it would cost to build them from scratch, was in the range of USD2 B–USD3 B.

"It's going to be a drawn-out process with some debt being cut off," the source said.

Mossi Ghisolfi (M&G) declined to comment. Indorama, Reliance Industries and Alpek were not immediately available for comment.

M&G - which in Italy owns Beta Renewables, the first plant in the world to produce second-generation ethanol -recently said it had filed for creditor protection for units in Italy.

"The companies are studying a proposal for an arrangement that will allow their overall activities to continue as a going concern, although they cannot exclude alternative solutions at the end of the ongoing technical assessments," the company said on its website.

Italian investment bank Mediobanca is leading the process in Italy, a different source said, adding a series of private equity and industrial players had expressed early interest.

The source declined to say how much the Italian operations could be worth but said it could be "several hundred millions."

The Mossi Ghisolfi Group is controlled by M&G Finanziaria, which is owned by the Ghisolfi family. The group's activities are sub-divided into the following businesses: PET, its raw materials; biofuels, chemical products derived from non-food biomass; polyester fibre and biodegradable polymers.
MRC