The company has reduced its 55% interest to 50% to achieve a balanced ownership structure. Grace and Chevron have also amended certain agreements governing Grace’s supply of catalyst to the JV and the related funding of capital spending in support of the JV.
ART is a supplier of hydroprocessing catalysts, which remove sulfur and other contaminants from petroleum to produce environmentally-friendly transportation fuels, and allow refiners to process less expensive feedstocks. The use of these catalysts is growing as fuel specifications are becoming stringent.
Greg Poling, vice president of W R Grace & Co and president of Grace Davison, said: “Grace is committed to providing our customers in the petroleum refining industry with innovative, technology-leading catalysts and systems. Our relationship with Chevron, through ART, is integral to that commitment. Given ART’s current size as a business and its growth prospects, this restructuring provides ART with a stronger and more flexible platform to pursue continued investment and growth opportunities.”
As a result of the sale, Grace intends to deconsolidate ART’s results of operations, cash flows and financial position from its consolidated financial statements on a prospective basis effective from December 1, 2009. Previously, Grace reported 100% of ART’s sales and 55% of ART’s income, with 45% of ART’s income reported as Chevron’s non controlling interest. Subsequent to the sale, Grace intends to record its investment in ART and its portion of ART’s income and dividends using the equity method of accounting.
According to Grace, the previously reported consolidated net sales for the nine months ended September 30, 2009 and years ended December 31, 2008 and 2007 were sales of $234.1m, $348.7m, and $335.7m, respectively, related to ART. As a result of this transaction, Grace expects to record a gain of approximately $5m.
