Trinseo PLC (Wayne, Pennsylvania) has advanced plans to divest its styrenics businesses by initiating the sale of its 50% stake in Americas Styrenics LLC (AmSty; The Woodlands, Texas), said the company.
the company announced on March 13. Trinseo, which expects to find a buyer within a year, said the proceeds will be used to pay down a portion of the recently issued $1.077 billion of term loans maturing in 2028.
The loans, obtained in September 2023 to refinance debt due in 2024 and 2025, where secured against Trinseo’s stake in AmSty, a joint venture with Chevron Phillips Chemical Company LLC (The Woodlands). In 2023, AmSty’s polystyrene business accounted for about 88% of Trinseo’s equity earnings, or $57 million, according to Trinseo’s Form 10-K.
“The sale of our ownership in AmSty is a logical step in our transformation as a specialty materials and sustainable solutions provider,” said Frank Bozich, president and CEO. “By executing the contractual ownership exit provision, we have a clear pathway to divest our interest in the joint venture. We expect the exit process to lead to a definitive arrangement no later than early 2025.”
AmSty’s production assets include 737,000 metric tons per year of polystyrene (PS) capacity in the US, 190,000 metric tons per year of PS capacity divided between Brazil and Columbia, and 953,000 metric tons per year of styrene monomer capacity in the US, according to data from S&P Global Commodity Insights.
Trinseo has for several years been restructuring its portfolio to focus on markets with higher growth, higher margins, and more stable earnings such as engineered materials and coatings, adhesives, sealants, and elastomers (CASE). In 2021, the company sold its synthetic rubber business to Synthos S.A. for $491 million, bought Arkema’s polymethyl methacrylate (PMMA) business for $1.38 billion, and bought PMMA producer Aristech for $445 million.
In November 2021, Trinseo announced that it was exploring the sale of its styrenics activities, including the company’s feedstocks and polystyrene reporting segments as well as its stake in AmSty. The effort was put on hold in July 2022, with Trinseo explaining that deteriorating conditions in the financial markets and economic uncertainty, particularly in Europe’s energy markets, had made it difficult to get the right price. In May 2023, however, Trinseo put styrenics back on the block.
Trinseo’s polystyrene and feedstocks segments had combined sales of $909 million in 2023. Trinseo’s wholly owned styrenics assets include 370,000 metric tons per year of polystyrene capacity divided among locations in Schkopau, Germany; Tessenderlo, Belgium; and Cilegon, Indonesia, according to data from S&P Global Commodity Insights. Trinseo shut down its Bohlen, Germany, styrene plant at the end of 2022, and the company plans soon to shut down its only other styrene plant, located at Terneuzen, Netherlands.
mrchub.com