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Specialty chemicals company Rockwood Holdings Inc. (ROC - Snapshot Report) has repaid all outstanding borrowings under the secured facility of its fully-owned unit Sachtleben GmbH. The company repaid the debt using cash on hand.
The total €394.5 million ($508.9 million) debt repaid consists of €190 million ($245.1 million) of term loan A, €200 million ($258 million) of term loan B and a €4.5 million ($5.8 million) revolving credit facility. The repayment follows Rockwood’s $250 million reduction of its senior secured term loan B credit facility in Oct last year.
Sachtleben, a leading producer of high-quality titanium dioxide (TiO2), was formed in Sep 2008 through the union of Rockwood’s TiO2 pigments and functional additives business and Finland-based specialty chemicals maker Kemira Oyj’s TiO2 business. Its major products include TiO2 in anatase grade, TiO2 in rutile grade and titanium specialties. Sachtleben caters to a bevy of industries including synthetic fibers, plastics, paints, packaging inks, coatings, cosmetics and pharmaceuticals.
Rockwood recently bought Kemira’s 39% stake in Sachtleben for €97.5 million ($130 million). The weak TiO2 market conditions triggered Kemira’s decision to divest its interest in the joint venture. The transaction provided Rockwood full control of Sachtleben.
However, Rockwood is also contending with a soft TiO2 market. The company witnessed weak demand in the TiO2 business in 2012. Lower pricing and higher raw material costs affected the business in the fourth quarter. Rockwood sees weakness in its TiO2 business in the first half of 2013. The company is planning to exit the business by the end of 2013.
Rockwood noted that the debt repayment underscores its progress towards achieving its stated goals of de-leveraging its balance sheet and facilitating the divestiture process for Sachtleben. 
Rockwood currently retains a short-term (1 to 3 months) Zacks Rank #4 (Sell).
Other companies in the specialty chemicals space with favorable Zacks Rank are Balchem Corp. , HB Fuller Co. (FUL - Snapshot Report) and Novozymes A/S (NVZMY). While Balchem holds a Zacks Rank #1 (Strong Buy), both HB Fuller and Novozymes retain a Zacks Rank #2 (Buy).

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