Note 4 - Discontinued Operations and Business Dispositions |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] |
4. DISCONTINUED OPERATIONS AND BUSINESS DISPOSITIONS
SaLE of Venator InterEST
On
December 23, 2020, we completed the sale of approximately
42.4 million ordinary shares of Venator Materials PLC (“Venator”) and received approximately
$99 million in cash. Subsequent to this sale of ordinary shares of Venator, we
no longer account for our current remaining ownership interest in Venator as an equity method investment, but rather as an investment in equity securities that are marked to fair value with changes in fair value reported in earnings. Concurrently with the sale of Venator ordinary shares, we entered into an option agreement, pursuant to which we granted an option to funds advised by SK Capital Partners, LP to purchase the remaining approximate
9.7 million ordinary shares we hold in Venator at
$2.15 per share. The option will expire on
June 23, 2023 and will
not be exercisable so long as such exercise would result in a default or an "Event of Default" under Venator’s Term Loan Credit Agreement and Revolving Credit Agreement. We record this option agreement at fair value with changes in fair value reported in earnings.
For the
three months ended
March 31, 2021 and 2020, we recorded net losses of
$19 million and
$110 million, respectively, to record our investment in Venator and related option to sell our remaining Venator shares at fair value. These net losses were recorded in “Fair value adjustments to Venator investment” on our condensed consolidated statements of operations.
Summarized financial information of Venator for the
three months ended
March 31, 2020 is as follows (in millions):
Sale of Chemical Intermediates Businesses
On January 3, 2020, we completed the sale of our chemical intermediates businesses, which includes PO/MTBE, and our surfactants business (“Chemical Intermediates Businesses”) to Indorama Ventures Holdings L.P. (“Indorama”) in a transaction valued at approximately $2 billion, comprised of a cash purchase price of approximately $1.92 billion and the transfer of approximately $72 million in net underfunded pension and other post-employment benefit liabilities. In connection with this sale, we recognized a net after-tax gain of $758 million in the first quarter of 2020. Also, in connection with this sale, we entered into long-term supply agreements with Indorama for certain raw materials at market prices supplied by the Chemical Intermediates Businesses.
The following table reconciles major line items constituting pretax income of discontinued operations to after-tax income of discontinued operations as presented in our condensed consolidated statements of operations (dollars in millions):
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