Home Blogs Chemicals and the Economy Dow puts debt problems behind it

Dow puts debt problems behind it

Leverage
By Paul Hodges on 04-Mar-2010

Dow right.jpgA year ago, the Dow Chemical stock price was below $6, giving the company a total market capitalisation of just c$7bn.

Since then, Dow has regained the initiative in a very focused way.

First, it sold Morton Salt for $1.7bn, then it sold $2.25bn of new equity and refinanced $4.65bn of long-term debt. Next, it sold the calcium chloride and refining businesses for $925m. And now Tuesday saw the disposal of the Styron business to Bain for $1.63bn. Plus Dow puts a $400m value on the long-term supply/purchase deals attached to the sale.

The stock price has, of course, responded to these successes. It is now trading at c$29, giving a market capitalisation of $33bn. The blog congratulates those responsible in Dow for this major turnaround, at a time when market conditions have remained difficult.