ICI bites demerger bullet, Zeneca guns for [Brit pounds]1. 3-billion rights issue
Any lingering doubts as to ICI's (London) intentions to follow through its demerger proposals were dispelled last week. The company will hive off its bioscience business into Zeneca Group plc, which will make a [Brit pounds]1.3-billion ($1.9 billion) rights issue in June 1993. Shareholders, whose approval for the historic move will be sought in late May, will receive one fully paid Zeneca share for each ICI share. Proceeds from the rights issue will be used to reduce Zeneca's indebtedness to ICI by about 70%. Acknowledging that ICI had spread the jam too thinly' during its expansion in the 1980s, chief executive Ronnie Hampel says the new ICI will be a cost-conscious, no-frills' organization and that businesses that failed to perform would be restructured or closed. He is not expecting any help from the economy' in 1993. Of ICI's remaining petrochemicals and plastics businesses, Hampel says that despite stringent measures to reduce the cost base[hor ellipsis]it is clear they will not reach a return on capital that will justify reinvestment by ICI.' He does not see them as closure candidates but as 'businesses that will require further restructuring.' Hampel notes a dozen clearly identified areas for expansion,' including paints, catalysts, titanium dioxide, and chlorofluorocarbon replacements. Losses in materials, where substantial rationalization has failed to halt the slide, will be reduced on completion of the DuPont deal - expected by midyear. Further measures' would be necessary for the residual bit of advanced materials in the US,' he says.
- OSTI ID:
- 6647272
- Journal Information:
- Chemical Week; (United States), Vol. 152:8; ISSN 0009-272X
- Country of Publication:
- United States
- Language:
- English
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