Franco-German drugmaker Aventis has responded to reports claiming that it is seeking to delay the divestment of its stake in the loss-making chemicals major Rhodia.
The company has now confirmed that it is seeking "additional flexibility" from regulators over the sale of most of its 15.3 per cent share in the business, which was part of the conditions that antitrust regulators gave at the time the company was formed from the merger of Hoechst and Rhone-Poulenc.
Initially, Strasbourg-headquartered Aventis declined to comment on a press reports in France which alleged that it has asked the European Commission for a delay to the sale of its stake in Rhodia.
Under the terms of the antitrust ruling, Aventis is currently obliged to dispose of all but 5 per cent the share before April next year. Chief financial officer at Aventis Patrick Langlois said: "our objective remains to divest all non-core businesses by the end of 2004."
If a revised timetable for the disposal can now be negotiated, it may help relieve financial pressure on the chemicals firm. Rhodia is in the process of a restructuring exercise, due to complete by the end of this year, that is designed to re-invigorate the company's fortunes.
Last week, Rhodia reported net sales of €1.29 billion euros for the third quarter of 2003, 7.7 per cent lower than the second quarter of 2003 and down 19 per cent from the same period of 2002, although the decline was only 4.7 per cent if divestitures and currency effects are taken into account. The company blamed the performance on the continued adverse economic environment and a "collapse in demand". It posted a net loss in the quarter of €99 million.
Rhodia's pharmaceutical and agrochemical activities saw sales drop 36 per cent to €182 million compared to third-quarter 2002. Rhodia Pharma Solutions suffered from the negative impact of the decision taken by the US Food & Drug Administration (FDA) to postpone certain approvals.
However, on a more positive note, Rhodia said the new organisation adopted at the beginning of the year enabled it to "broaden its customer base allowing it to look forward to significant new growth potential in 2004/2005 in market segments related to custom manufacturing." The company has just leased a major new facility for the development services element of this business from Dow.
In order to achieve a delay in the disposal, Aventis will have to prove to the European Commission, the relevant antitrust authority in this case, that failure to delay the divestment will cause irreparable harm to the business.
Meanwhile, as part of its continued push to become a pharmaceutical pure-play, Aventis yesterday completed the divestment of its 11.85 per cent stake in Swiss chemicals company Clariant.