Indianapolis, US-based Vertellus Specialties has long been a player in the castor oil derivatives market even before it was formed in 2006 through the combined operations of Reilly Industries and Rutherford Chemicals (anybody remembers sebacic acid producer, Caschem based in New Jersey?).
Vertellus recently announced that it has voluntarily filed for Chapter 11 Bankruptcy protection in order to restructure debt and with plans to sell the company. It’s term loan lenders, including Black Diamond Capital Management and BlackRock agreed to purchase the company for $453.8 million in a stalking horse offer to maximize the value of its assets (or avoid low bids as part of/before a court action.
Vertellus received downgrades from credit rating agencies in recent months after failing to make a quarterly interest payment. According to Wall Street Journal, Vertellus cited significant earnings deterioration in its agricultural section as well as a growing risk of environmental liabilities and increased competition from China. Weaker agricultural markets meant less demand and lower prices for its pyridine, a chemical used in many pesticides.
The bankruptcy filings do not include Vertellus’ international entities in Belgium, the UK, India and China, although these entities are included in the sale process. The Chapter 11 case also does not include Vertellus Performance Chemicals, which produces sodium borohydride, as it has separate financing agreements in place under the ownership of Wind Point Partners.
Vertellus expects to complete the sale process within the next 3-4 months.
In terms of Vertellus’ renewable chemicals portfolio, the company produces castor oil-based derivatives such as polyols, polymerized castor oils, castor oil esters, dehydrated castor oils, ethoxylated castor oil surfactants, hydroxy fatty acids, castor wax, undecyclenic acid, sebacic acid, sebacate esters, etc. The company has also been marketing citric acid esters-based plasticizers as well as castor oil-based plasticizers.