International Chemical Company – Portfolio
The assets were located in the United States, Mexico and Switzerland.
This portfolio consisted of nine former manufacturing facilities used by the Seller in the production of a variety chemicals. The majority of the properties were in-fill sites located in industrial areas which were suitable for future industrial reuse.
The Seller had numerous surplus, idled facilities that had ongoing environmental liabilities. Addressing environmental issues was a non-core function of the Seller which acted as a constant drag on earnings and management time. As part of a larger corporate restructuring, the Seller desired to sell these assets and their underlying environmental liabilities.
The value of the environmental liabilities for the portfolio exceeded the aggregate value of the assets. As a result, the Seller transferred several assets, and a subsidiary holding some of the assets to an affiliate of RESIGHT. Individual remediation plans were established and implemented at each site. Each real estate asset was evaluated for highest and best use and sold to future buyers. Several sites had no residual value and were donated to municipalities for public use. Remediation was completed in 2013, the last property was sold in 2014 and the corporate entities were wound up in 2015.
The RESIGHT Solution
Where others saw a series of abandoned and under-utilized properties, RESIGHT saw significant value creation in remediating and repositioning these sites as a portfolio. Because the value of the liabilities exceeded the value of the properties, RESIGHT structured a transaction where the Seller partially funded the necessary remediation, with RESIGHT responsible for selling the assets to address the remaining remedial funding requirements in order to make a profit on the portfolio. This unique transaction structure allowed the Seller to deconsolidate the liabilities on its financial statements and achieve its larger refinancing objectives.