In a brief statement Monday announcing its proposed initial public offering, the company said substantially all the proceeds from the sale will be used to repay debt that a Securities and Exchange Commission filing put at about $5.8 billion as of June 30.
Existing shareholders are expected to participate in the offering, the statement said.
Other details, including how much the conglomerate hopes to raise, are unavailable.
Huntsman will provide more information when it files a registration statement with the SEC later this year. Until then, the future role of the Huntsman family in the business is unclear, as is the future of the companies' Salt Lake City headquarters.
Speculation has swirled within the chemicals industry for months that Huntsman was poised to launch an IPO - a step some suggest may be aimed at helping the company's founder dispose of his interest in the conglomerate to help fund his charitable work. Jon M. Huntsman has committed more than $200 million to the Huntsman Cancer Institute at the University of Utah.
Chemical Week magazine in June reported on its Web site that Huntsman hoped to raise as much as $1.5 billion through initial sales of its shares. The magazine speculated Huntsman's IPO will be followed by a secondary offering a year later.
"There have been a lot of reports, a lot of speculation," Huntsman spokesman Don Olsen said Monday, indicating the Huntsman Cos. will not comment on any conjecture. After a corporation announces plans to go public, the SEC discourages public statements that could be viewed as attempts to influence the outcome of the IPO.
Monday's announcement opens a new chapter for a conglomerate that made Jon M. Huntsman a billionaire and funded philanthropic works that made his a household name. His son, Jon Huntsman Jr., is the Republican candidate for Utah governor.
Huntsman Sr. in 1970 founded the company as a container maker that gained recognition for producing the clamshell container McDonald's once used to package Big Macs.
He expanded rapidly through acquisitions, including one five years ago that added units of Imperial Chemical Industries PLC, and doubled the conglomerate's size. That acquisition was partially financed using high-yield bonds and mounted the conglomerate's debt during a time of growing turmoil within the chemical industry.
Peter Huntsman assumed management of his father's chemical empire in July 2000 and quickly embarked on a cost-cutting initiative that some viewed as a move to better position the company for a new role as a publicly held corporation.
Much of the benefit of those $200 million in cost-cutting initiatives, however, was overshadowed by the recent run-up in oil and natural gas prices that eroded the benefit of rising chemical prices and demand.
The Huntsman Cos. a month ago reported a second-quarter loss of $185.7 million on revenue of $2.8 billion.
A year earlier, the company reported a loss for its second quarter ended June 30, 2003, of $101 million from revenue of $2.2 billion.
Despite the widening second-quarter loss, the Huntsman Cos. indicated its operations showed significant improvement, especially given "high and volatile energy and feedstock costs that continue to plague the [chemical] industry," Huntsman said at that time.
Since Jan. 1, 1999, four chemical companies have raised $393 million through IPOs, according to Bloomberg News.
However, lingering high energy prices have some securities analysts specializing in the chemicals industry questioning whether energy cost problems may dampen enthusiasm for additional IPOs.
"I wouldn't be too excited about it," said Clayton Mahaffey, a securities analyst with Pittsburg Research. "The nature of the [chemicals] industry is that it is extremely dependent on oil and natural gas prices. Given those [energy cost] problems, the competition and [Huntsman's] debt, it is hard to say whether or not they will be able to find buyers for their stock."
Yet analyst Michael Judd of Greenwich Consultants suggested that with the industry now apparently emerging from its doldrums, a number of other publicly traded large chemical products manufacturers may undertake secondary offerings of their shares.
"We may see a few more IPOs as well," he said.
steve@sltrib.com
