Huntsman Declares Venator IPO Completion, Plans to Cut Debt

Huntsman CorporationHUN has announced the completion of initial public offering (IPO) by its subsidiary, Venator Materials PLC, a global chemical company and manufacturer of titanium dioxide (TiO2) pigments and performance additives.

The IPO of 26,105,000 ordinary shares includes 3,405,000 ordinary shares issued upon the exercise by the underwriters of their option, in full, to purchase additional ordinary shares. Venator's ordinary shares has started trading on the NYSE under the ticker symbol "VNTR".

Huntsman plans to use the net IPO proceeds of about $475 million and roughly $725 million of net proceeds from the Venator debt distribution to repay its existing debt. Significant debt reduction worth $1.2 billion will make Huntsman's trailing 12-month pro-forma net-debt-to-EBITDA roughly 2.5 times.

Further, the debt reduction will lower Huntsman's annual cash interest expense by about $45 million. The company has repaid over $2 billion of debt, including the Venator proceeds, since Jan 2016.

According to the company, this IPO is a significant milestone as it will create considerable value for shareholders through debt reduction. Huntsman's increased financial strength and the completion of this IPO makes it well-poised toward completing the merger of equals with Clariant.

Shares of Huntsman have declined 1.2% in the last three months versus the 4% gain of its industry .

Huntsman's adjusted earnings of 85 cents per share for second-quarter 2017 topped the Zacks Consensus Estimate of 67 cents. Revenues of $2,616 million came in line with the Zacks Consensus Estimate. The second quarter benefited from enhanced free cash flow generation, solid underlying fundamentals and the company's downstream strategy. The company expects to attain earnings growth in all business segments in 2017.

Huntsman witnessed decreased revenues in its Pigments and Additives unit in the second quarter due to lower sales partly offset by higher average selling prices. Revenues of Performance Products also declined owing to lower sales volume resulting from the sale of the European Surfactants business to Innospec Inc. IOSP .

Huntsman Corporation Price and Consensus

Huntsman Corporation Price and Consensus | Huntsman Corporation Quote

Huntsman currently carries a Zacks Rank #4 (Sell).

Stocks to Consider

Some better-ranked stocks in the basic materials space are POSCO PKX and Kronos Worldwide Inc KRO . Both stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 stocks here .

POSCO has expected long-term earnings growth rate of 5%.

Kronos has expected long-term earnings growth rate of 5%.

More Stock News: Tech Opportunity Worth $386 Billion in 2017

From driverless cars to artificial intelligence, we've seen an unsurpassed growth of high-tech products in recent months. Yesterday's science-fiction is becoming today's reality. Despite all the innovation, there is a single component no tech company can survive without. Demand for this critical device will reach $387 billion this year alone, and it's likely to grow even faster in the future.

Zacks has released a brand-new Special Report to help you take advantage of this exciting investment opportunity. Most importantly, it reveals 4 stocks with massive profit potential. See these stocks now>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Kronos Worldwide Inc (KRO): Free Stock Analysis Report

Huntsman Corporation (HUN): Free Stock Analysis Report

Innospec Inc. (IOSP): Free Stock Analysis Report

POSCO (PKX): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics


Latest Markets Videos


    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at

    Learn More