Rhodia: no comment on divestment rumours

Chemicals company Rhodia has played down reports in the French
press that it is considering a sell-off of its activities in
silicon, food additives and phosphates as part of an asset
divestment programme aimed at improving its profitability.

The company said that it would not comment on 'rumours' in the press and would make a statement only when a final agreement on the divestment package has been reached. Rhodia said in October that it is hoping to raise €700 million through the sale of non-core assets by the end of next year, and was assessing businesses with a value of €1.3 billion.

Pharmaceuticals remains a core focus for the group and is not thought to be involved in the divestment deliberations. Indeed, at the CPhI meeting earlier this year, the group made a point of confirming its commitment to the Rhodia Pharma Solutions business, unveiling a new US facility for its development services division.

An article in Le Figaro said that the company's management had completed several weeks of studies aimed at drawing up a list of disposable assets. The newspaper noted that BNP Paribas has been mandated to sell the company's silicon operations with annual sales of around €400 million, while Credit Lyonnais has been asked to find a buyer for certain elements in the company's food and additives division.

Rhodia said "speculation regarding the effect on the group's business portfolio during a process such as this is normal".

The company is selling assets to help bring down debt of €2.13 billion. Talks with its banks on renegotiating covenants on the debt are due to be concluded by the end of the year.