With the court-ordered 1 October deadline for Hexion Specialty Chemicals (Columbus, Ohio / USA; www.hexion.com) to complete its USD 10.6 bn takeover of Huntsman (Salt Lake City, Utah / USA) already passed, Hexion and its private equity owner Apollo (New York / USA; www.apolloic.com) are struggling to tie up the funding package – see Plasteurope.com of 02.10.2008.

Hexion has been trying to back away from the transaction since June of this year, when the equity markets and the petrochemicals market began to run out of steam, claiming the merger of the two solvent companies would create an insolvent entity. The speciality chemicals player could still refuse to go ahead. However, Delaware chancery court judge Stephen Lamb has stressed that Hexion/Apollo would be subject to the previously agreed USD 325m break-up fee as well as possible unquantified damages. Huntsman itself has asked for USD 3 bn.

Apollo is initially making USD 540m available to Hexion to help wrap up the deal, which has since been approved by the US regulatory anti-trust authority, Federal Trade Commission. EU competition authorities gave the thumbs up in July, providing Hexion agreed to divest some of its epoxy resins business – see Plasteurope.com of 04.07.2008. To ease the burden on Hexion, Apollo also agreed to waive its right to a transaction fee and suspend its ongoing monitoring fees for three years.

Providing the entire deal does not crash on the shoals of financing constraints, the way is now clear for the Czech Republic’s Spolchemie (Ústí nad Labem; www.spolchemie.cz) to take epoxy assets from both Huntsman and Hexion. It has created a new company, CHS Resins, to run the business.