Koppers Holdings Inc. has entered into a definitive agreement to sell Koppers (Jiangsu) Carbon Chemical Company Limited (KJCC), to Fangda Carbon New Material Co., Ltd. (Fangda Carbon) and C-Chem Co., Ltd, a subsidiary of NIPPON STEEL Chemical & Material Co., Ltd.
KJCC is a tar distillation facility located in Pizhou City, China and is 75% owned by the company with the remaining 25% owned by Yizhou Group Company Limited.
The closing of the transaction is subject to customary closing conditions, including receipt of regulatory approvals in China and approval of the transaction by the shareholders of Fangda Carbon. The company estimates that regulatory approvals could be received in approximately four to six months based upon the timeline for similar transactions.
The total purchase price is $107 million, adjusted for cash, working capital at closing and adjusted to the extent certain capital expenditures of KJCC are incurred prior to closing and indebtedness of the transaction.
Koppers expects to realize approximately $65 million of net cash, after noncontrolling interest, taxes and expenses. The company plans to apply the cash proceeds toward debt reduction, consistent with its stated goals.
In connection with the transaction, KJCC has reached agreement with its largest customer in China to resolve the previously disclosed contractual dispute related to application of contractual pricing terms. The settlement of the dispute will become effective upon the closing of the transaction.
Koppers is an integrated global provider of treated wood products, wood treatment chemicals and carbon compounds.
