424B3
CALCULATION OF REGISTRATION FEE
|
|
|
|
|
|
|
|
|
|
|
Title of Each Class of |
|
Amount to be |
|
Maximum Offering |
|
Maximum Aggregate |
|
Amount of |
Securities to be Registered |
|
Registered(1) |
|
Price Per Share(2) |
|
Offering Price(1)(2) |
|
Registration Fee(3) |
|
Series A Common Stock, par value $.0001 per share
|
|
40,250,000 |
|
$22.435 |
|
$903,008,750 |
|
$96,622 |
|
|
|
(1) |
Includes 5,250,000 shares of Series A Common Stock
that may be purchased by the underwriter from the selling
stockholders upon the exercise of the underwriters
over-allotment option. |
|
(2) |
Estimated pursuant to Rule 457(c) under the Securities Act
of 1933, as amended, the offering price and registration fee are
based on the average of the high and low prices for the
Series A Common Stock on May 9, 2006, as reported on
the New York Stock Exchange. |
|
(3) |
Calculated in accordance with Rule 457(r) under the
Securities Act of 1933, as amended. |
|
|
|
PROSPECTUS SUPPLEMENT
(To Prospectus dated May 9, 2006) |
|
|
35,000,000 Shares
Celanese Corporation
SERIES A COMMON STOCK
The selling stockholders identified in this prospectus
supplement are offering 35,000,000 shares of Series A
common stock of Celanese Corporation in an underwritten
offering. The selling stockholders will receive all of the net
proceeds from this offering. You should carefully read this
prospectus supplement and the accompanying prospectus, together
with the documents we incorporate by reference, before you
invest in our Series A common stock.
The Series A common stock is listed on the New York Stock
Exchange under the symbol CE. The last reported sale
price of Celanese Corporations Series A common stock
on the New York Stock Exchange on May 9, 2006 was $22.42
per share.
Investing in our Series A common stock involves
risks. See Risk Factors described on
page S-12 of this prospectus supplement and those contained
in our incorporated documents to read about factors you should
consider before buying shares of the Series A common
stock.
The underwriter will purchase the Series A common stock
from the selling stockholders at a price of $21.05 per share,
resulting in $736,750,000 aggregate proceeds to the selling
stockholders.
The underwriter may offer the Series A common stock from
time to time in one or more transactions in the
over-the-counter market
or through negotiated transactions at market prices or at
negotiated prices. See Underwriter.
The selling stockholders have granted the underwriter the right
to purchase up to an additional 5,250,000 shares of
Series A common stock to cover over-allotments. The selling
stockholders will receive the net proceeds from any shares sold
pursuant to the underwriters over-allotment option. If the
over-allotment option is exercised in full, the selling
stockholders will receive aggregate proceeds of $847,262,500.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved these
securities or passed upon the accuracy or adequacy of this
prospectus supplement or the accompanying prospectus. Any
representation to the contrary is a criminal offense.
The underwriter expects to deliver the shares to purchasers on
May 15, 2006.
Goldman, Sachs & Co.
May 10, 2006
TABLE OF CONTENTS
Prospectus Supplement
|
|
|
|
|
|
|
Page | |
|
|
| |
|
|
|
i |
|
|
|
|
ii |
|
|
|
|
S-1 |
|
|
|
|
S-12 |
|
|
|
|
S-15 |
|
|
|
|
S-17 |
|
|
|
|
S-17 |
|
|
|
|
S-17 |
|
|
|
|
S-19 |
|
|
|
|
S-20 |
|
|
|
|
S-22 |
|
|
|
|
S-29 |
|
|
|
|
S-31 |
|
|
|
|
S-34 |
|
|
|
|
S-36 |
|
|
|
|
S-38 |
|
Prospectus
|
|
|
|
|
|
|
Page | |
|
|
| |
|
|
|
i |
|
|
|
|
1 |
|
|
|
|
1 |
|
|
|
|
2 |
|
|
|
|
3 |
|
|
|
|
4 |
|
|
|
|
6 |
|
|
|
|
6 |
|
|
|
|
7 |
|
|
|
|
12 |
|
|
|
|
15 |
|
|
|
|
16 |
|
|
|
|
17 |
|
|
|
|
17 |
|
ABOUT THIS PROSPECTUS SUPPLEMENT
This document is in two parts. The first part is this prospectus
supplement, which describes the specific terms of the offering
of common stock and also adds to and updates information
contained in the accompanying prospectus. The second part is the
accompanying prospectus, which gives more general information.
If the description of the offering varies between this
prospectus supplement and the accompanying prospectus, you
should rely on the information in this prospectus supplement.
Terms capitalized but not defined in this prospectus supplement
shall have the meaning ascribed to them in the accompanying
prospectus.
You should rely only on the information contained in this
prospectus supplement and the accompanying prospectus. None of
us, our subsidiaries or the selling stockholders have authorized
anyone to provide you with information different from that
contained in this prospectus supplement and the accompanying
prospectus. The prospectus supplement and the accompanying
prospectus may be used only for the purposes for which it has
been published, and no person has been authorized to give any
information not contained in this prospectus supplement and the
accompanying prospectus. If you receive any other information,
you should not rely on it. The selling stockholders are not
making an offer of these securities in any jurisdiction where
the offer is not permitted.
i
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference the
information contained in documents that we file with them, which
means that we can disclose important information to you by
referring you to those documents. The information incorporated
by reference is considered to be part of this prospectus
supplement and supersedes information incorporated by reference
that we filed with the SEC prior to the date of this prospectus
supplement. Information that we file in the future with the SEC
automatically will update and supersede, as appropriate, the
information contained in this prospectus supplement and in the
documents previously filed with the SEC and incorporated by
reference into this prospectus supplement. We incorporate by
reference the documents listed below and any future filings we
will make with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 on or after the
date of this prospectus supplement but before the end of the
offering made under this prospectus supplement.
|
|
|
|
|
Our Annual Report on
Form 10-K for the
fiscal year ended December 31, 2005, filed on
March 31, 2006; |
|
|
|
our Quarterly Report on
Form 10-Q for the
quarterly period ended March 31, 2006, filed on May 9,
2006; |
|
|
|
Our Current Reports on
Form 8-K filed on
January 6, 2006, March 7, 2006, March 13, 2006,
April 6, 2006 and April 11, 2006; and |
|
|
|
The description of our Series A common stock contained in
our Form 8-A,
filed on January 18, 2005. |
You can request a copy of these filings at no cost, by writing
or calling us at the following address:
|
|
|
Celanese Corporation |
|
1601 West LBJ Freeway |
|
Dallas, TX 75234-6034 |
|
(972) 443-4000 |
You should read the information in this prospectus supplement
together with the information in the documents incorporated by
reference. Nothing contained herein shall be deemed to
incorporate information furnished to, but not filed with, the
SEC.
ii
PROSPECTUS SUPPLEMENT SUMMARY
This summary highlights selected information contained
elsewhere in this prospectus supplement or the accompanying
prospectus, but it may not contain all of the information that
you should consider before deciding to invest in our common
stock. You should read this entire prospectus supplement,
including the Risk Factors section, the accompanying
prospectus, the documents incorporated by reference (including
the Risk Factors section therein) and the other
documents to which we refer for a more complete understanding of
this offering.
Our Company
All references in this prospectus supplement to
we, our and us refer
collectively to Celanese Corporation and its consolidated
subsidiaries.
We are an integrated global producer of value-added industrial
chemicals and have the first or second market positions
worldwide in products comprising the majority of our sales. We
are the worlds largest producer of acetyl products,
including acetic acid and vinyl acetate monomer
(VAM), polyacetal products (POM), as
well as a leading global producer of high-performance engineered
polymers used in consumer and industrial products and designed
to meet highly technical customer requirements. Our operations
are located in North America, Europe and Asia. In addition, we
have substantial ventures primarily in Asia. We believe we are
one of the lowest-cost producers of key building block chemicals
in the acetyls chain, such as acetic acid and VAM, due to our
economies of scale, operating efficiencies and proprietary
production technologies.
We have a large and diverse global customer base consisting
principally of major companies in a broad array of industries.
For the year ended December 31, 2005, approximately 36% of
our net sales were to customers located in North America,
approximately 40% to customers in Europe and Africa and
approximately 24% to customers in Asia, Australia and the rest
of the world.
Segment Overview
We operate through four business segments: Chemical Products,
Technical Polymers Ticona, Acetate Products and Performance
Products. The table below illustrates each segments net
sales to external customers for the year ended December 31,
2005, as well as each segments major products and end use
markets.
|
|
|
|
|
|
|
|
|
|
|
|
|
Technical |
|
|
|
|
|
|
Chemical Products |
|
Polymers Ticona |
|
Acetate Products(2) |
|
Performance Products |
|
|
|
|
|
|
|
|
|
2005 Net Sales
(1) |
|
$4,200 million |
|
$887 million |
|
$659 million |
|
$180 million |
Major Products
|
|
Acetic acid
Vinyl acetate monomer (VAM)
Polyvinyl alcohol (PVOH)
Emulsions
Acetic anhydride
Acetate esters
Carboxylic acids
Methanol |
|
POM
UHMW-PE (GUR)
Liquid crystal polymers
(Vectra)
Polyphenylene sulfide
(Fortron) |
|
Acetate tow |
|
Sunett sweetener
Sorbates |
Major End-Use
Markets |
|
Paints
Coatings
Adhesives
Lubricants
Detergents |
|
Fuel system components
Conveyor belts
Electronics
Seat belt mechanisms |
|
Filter products |
|
Beverages
Confections
Baked goods
Dairy products |
|
|
(1) |
Consolidated net sales of $6,070 million for the year ended
December 31, 2005 also include $144 million in net
sales from Other Activities, primarily attributable to our
captive insurance companies and our AT Plastics business. Net
sales in 2005 of Chemical Products excludes inter-segment sales
of $136 million for the year ended December 31, 2005. |
|
(2) |
In 2005, we exited the acetate filament business and commenced
consolidating our flake and tow production to three sites,
instead of five. |
S-1
Our Chemical Products segment produces and supplies acetyl
products, including acetic acid, acetate esters, VAM, polyvinyl
alcohol and emulsions. We are a leading global producer of
acetic acid, the worlds largest producer of VAM and the
largest North American producer of methanol, the major raw
material used for the production of acetic acid. We are also the
largest polyvinyl alcohol producer in North America. These
products are generally used as building blocks for value-added
products or in intermediate chemicals used in the paints,
coatings, inks, adhesives, films, textiles and building products
industries. Other chemicals produced in this segment are organic
solvents and intermediates for pharmaceutical, agricultural and
chemical products. For the year ended December 31, 2005,
net sales to external customers of acetyls were
$1,966 million, acetyl derivatives and polyols were
$1,003 million and all other business lines combined were
$1,231 million.
|
|
|
Technical Polymers Ticona |
Our Technical Polymers Ticona segment (Ticona)
develops, produces and supplies a broad portfolio of high
performance technical polymers for use in automotive and
electronics products and in other consumer and industrial
applications, often replacing metal or glass. Together with our
45%-owned venture Polyplastics Co. Ltd
(Polyplastics), our 50%-owned venture Korea
Engineering Plastics Company Ltd., or KEPCO, and Fortron
Industries, our 50-50 venture with Kureha Chemicals Industry of
Japan, we are a leading participant in the global technical
polymers business. The primary products of Ticona are polyacetal
products, or POM, and GUR, an ultra-high molecular weight
polyethylene. POM is used in a broad range of products including
automotive components, electronics and appliances. GUR is used
in battery separators, conveyor belts, filtration equipment,
coatings and medical devices. For the year ended
December 31, 2005, sales to external customers in this
segment were $887 million.
Our Acetate Products segment primarily produces and supplies
acetate tow, which is used in the production of filter products.
We are one of the worlds leading producers of acetate tow
including production by our ventures in China. In October 2004,
we announced plans to consolidate our acetate flake and tow
manufacturing by early 2007 and to exit the acetate filament
business, which ceased production in April 2005. This
restructuring has been implemented to increase efficiency,
reduce over-capacities in certain manufacturing areas and to
focus on products and markets that provide long-term value. For
the year ended December 31, 2005, sales to external
customers in this segment were $659 million.
The Performance Products segment operates under the trade name
of Nutrinova and produces and sells a high intensity sweetener
and food protection ingredients, such as sorbates, for the food,
beverage and pharmaceuticals industries. For the year ended
December 31, 2005, sales to external customers in this
segment were $180 million.
Competitive Strengths
We have benefited from a number of competitive strengths,
including the following:
|
|
|
|
|
Leading Market Positions. We have the first or second
market positions globally in products that make up a majority of
our sales according to SRI Handbook and Tecnon Orbichem Survey.
Our leadership positions are based on our large share of global
production capacity, operating efficiencies, proprietary
technology and competitive cost structures in our major products. |
|
|
|
Proprietary Production Technology and Operating
Expertise. Our production of acetyl products employs
industry leading proprietary and licensed technologies,
including our proprietary AO Plus acid-optimization technology
for the production of acetic acid and VAntage vinyl acetate
monomer technology. |
S-2
|
|
|
|
|
Low Cost Producer. Our competitive cost structures are
based on economies of scale, vertical integration, technical
know-how and the use of advanced technologies. |
|
|
|
Global Reach. We operate thirty-one production facilities
throughout the world. The ventures in which we participate
operate ten additional facilities. We have a strong and growing
presence in Asia (particularly in China). Our infrastructure of
manufacturing plants, terminals, and sales offices provides us
with a competitive advantage in anticipating and meeting the
needs of our global and local customers in well-established and
growing markets, while our geographic diversity reduces the
potential impact of volatility in any individual country or
region. |
|
|
|
International Strategic Investments. Our strategic
investments, including our ventures, have enabled us to gain
access, minimize costs and accelerate growth in new markets,
while also generating significant cash flow and earnings. |
|
|
|
Diversified Products and End-Use Markets. We offer our
customers a broad range of products in a wide variety of end-use
markets. This product diversity and exposure help us reduce the
potential impact of volatility in any individual market segment. |
Business Strategies
We are focused on increasing operating cash flows,
profitability, return on investment and shareholder value, which
we believe can be achieved through the following business
strategies:
|
|
|
|
|
Maintain Cost Advantage and Productivity Leadership. We
continually seek to reduce our production and raw material
costs. Our advanced process control (APC) projects
generate savings in energy and raw materials while increasing
yields in production units. Most significantly, Six Sigma is a
pervasive and important tool in both operations and
administration for achieving greater productivity and growth. We
continue to focus on opportunities and process technology
improvements focused on energy reduction. We will continue using
best practices to reduce costs and increase equipment
reliability in maintenance and project engineering. |
|
|
|
Focused Business Investment. We intend to continue
investing strategically in growth areas, including new
production capacity, to extend our global market leadership
position. Historically, our strong market position has enabled
us to initiate capacity growth to take advantage of projected
demand growth. Our plans include adding the right capacity at
the right time, in the right location, at the right cost. |
|
|
|
Deliver Value-Added Solutions. We continually develop new
products and industry leading production technologies that solve
our customers problems. We believe that our customers
value our expertise, and we will continue to work with them to
enhance the quality of their products. |
|
|
|
Enhance Value of Portfolio. We will continue to further
optimize our business portfolio through divestitures,
acquisitions and strategic investments that enable us to focus
on businesses in which we can achieve market, cost and
technology leadership over the long term. In addition, we intend
to continue to expand our product mix into higher value-added
products. |
S-3
Recent Developments Results of Operations for the
Quarter Ended March 31, 2006
The results presented in this section have not been audited
and should not be taken as an indication of the results of
operations to be reported for any subsequent period or for the
full fiscal year.
|
|
|
|
|
|
|
|
|
|
|
Three Months | |
|
|
Ended March 31, | |
|
|
| |
|
|
2005 | |
|
2006 | |
|
|
| |
|
| |
|
|
(in millions, except | |
|
|
per share data) | |
Net sales
|
|
$ |
1,478 |
|
|
$ |
1,652 |
|
Operating profit
|
|
|
156 |
|
|
|
197 |
|
Net earnings (loss)
|
|
|
(10 |
) |
|
|
117 |
|
Basic earnings per share
|
|
$ |
(0.08 |
) |
|
$ |
0.72 |
|
Diluted earnings per share
|
|
$ |
(0.08 |
) |
|
$ |
0.68 |
|
Net sales increased 12% to $1,652 million for the quarter
compared to the same period last year on higher pricing with
strong demand, mainly in the Chemical Products segment, as well
as additional sales resulting from the acquisition of Acetex.
Net sales were partially offset by negative currency impacts of
3%. Operating profit rose to $197 million compared to
$156 million in the same period last year, as higher net
sales, continued cost improvements and lower special charges
helped to offset increased raw material costs and
$5 million in option expense associated with the adoption
of FAS 123(R). Net earnings increased significantly to
$117 million compared to a loss of $10 million,
primarily due to $102 million in lower interest expense
related to debt refinancing in 2005. Lower minority interest
expense related to our increased ownership of outstanding
Celanese AG shares also contributed to the increase in net
earnings.
Diluted earnings per share were a record $0.68 compared to
diluted loss per share of $0.08 in the same period last year.
The improvement was driven by the reduction in minority
interests and supported by continued strong business performance.
|
|
|
Recent Business Highlights |
|
|
|
|
|
We broke ground on our state of the art emulsions facility in
our Nanjing, China chemical complex. |
|
|
|
We announced plans to invest in a new
Celstran®
long fiber reinforced thermoplastics (LFT) compounding
plant in China. |
|
|
|
We launched VAntage
Plustm,
the companys next generation vinyl acetate monomer
technology, at the Cangrejera, Mexico facility. |
|
|
|
We continued to make progress on completing the squeeze-out of
remaining Celanese AG shareholders by setting the cash
compensation for the minority shares
at
62.22 per share and signing a legal settlement with
certain minority shareholders. There are currently less than
1 million minority shares outstanding. |
|
|
|
|
|
Chemical Products. Chemical Products demonstrated the
strength of its global franchise as the impact of recent
capacity additions in acetyls were less than expected. Net sales
increased from $1,044 million to $1,169 million as
pricing improvements were driven by high utilization across the
industry and increased energy and raw material costs. Chemical
Products also benefited from the inclusion of sales resulting
from the Acetex acquisition, which more than offset negative
currency effects. In comparison to exceptional results in the
first quarter of 2005, operating profit decreased from
$177 million to $162 million. Downstream products
experienced margin recovery. Price increases in basic products
did not offset increases in energy and raw material costs. |
|
|
|
Technical Polymers Ticona. Ticona performed well as it
continued to increase its penetration in key applications. Net
sales decreased from $239 million to $231 million
primarily due to negative currency effects. Higher pricing and
increased volume more than offset the loss of sales related to
the COC |
S-4
|
|
|
|
|
business which was divested in the fourth quarter of 2005.
Volumes improved, particularly in the GUR, LCP and European
polyacetal (POM) businesses, primarily driven by a stronger
business environment in Europe. Operating profit increased from
$39 million to $41 million compared to the same period
last year on margin recovery. Pricing and cost savings
initiatives more than offset increases in energy and raw
material costs. |
|
|
|
Acetate Products. Acetate Products significantly
improved performance reflects the benefits of its ongoing
revitalization efforts. Net sales increased by $2 million
to $167 million compared to the same period last year as
higher pricing and increased flake volumes more than offset
lower volumes for tow. The lower tow volumes resulted from the
shutdown of our Canadian tow plant while flake sales increased
to our recently expanded China tow ventures. Operating profit
increased by $13 million to $23 million compared to
the same period last year. Higher pricing and savings from the
revitalization efforts more than offset lower overall sales
volumes and higher raw material and energy costs. |
|
|
|
Performance Products. Performance Products continued to
demonstrate the strength of its core sweetener and food
protection businesses. Net sales increased $2 million to
$49 million compared to the same period last year. Volumes
for
Sunett®
sweetener increased, reflecting continued growth in the global
beverage and confectionary industry. Pricing for Sunett declined
as expected while both volume and pricing for Sorbates increased
in the quarter. Operating profit increased $4 million to
$17 million driven by robust volume increases and cost
savings initiatives. |
|
|
|
Equity and Cost Investments. Dividends received from
equity and cost investments totaled $24 million in the
quarter compared to $50 million in the same period last
year due to timing of dividend receipts in 2005. The income
statement impact, consisting of earnings of equity investments
and dividends from cost investments, was $28 million
compared to $29 million. |
|
|
|
Cash Flow. The increase in net debt is primarily due to a
seasonal increase in working capital, the balance sheet impact
of foreign exchange, and capital project spending. Cash and cash
equivalents at the end of the period were $312 million, a
decrease of $78 million from year end 2005. |
|
|
|
Taxes. Due to updated earnings projections for each tax
jurisdiction and the accounting treatment of the reversal of
valuation allowances under purchase accounting, our effective
tax rate for the quarter was 28%, higher than the forecasted
range of between 18% and 22%. The increase in the effective rate
is not expected to affect projected cash taxes due to
utilization of net operating losses and the non-cash nature of
the valuation allowance accounting treatment. |
|
|
|
Consolidated Statements of Operations
Unaudited |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended | |
|
|
March 31, | |
|
|
| |
|
|
2005 | |
|
2006 | |
|
|
| |
|
| |
|
|
(in millions, except per | |
|
|
share data) | |
Net sales
|
|
$ |
1,478 |
|
|
$ |
1,652 |
|
|
Cost of sales
|
|
|
(1,106 |
) |
|
|
(1,285 |
) |
|
|
|
|
|
|
|
Gross profit
|
|
|
372 |
|
|
|
367 |
|
|
Selling, general and administrative expenses
|
|
|
(159 |
) |
|
|
(152 |
) |
|
Research and development expenses
|
|
|
(23 |
) |
|
|
(18 |
) |
|
Special charges
|
|
|
(38 |
) |
|
|
|
|
|
Foreign exchange gain, net
|
|
|
3 |
|
|
|
|
|
|
Gain on disposition of assets, net
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
S-5
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended | |
|
|
March 31, | |
|
|
| |
|
|
2005 | |
|
2006 | |
|
|
| |
|
| |
|
|
(in millions, except per | |
|
|
share data) | |
Operating profit
|
|
|
156 |
|
|
|
197 |
|
|
Equity in net earnings of affiliates
|
|
|
15 |
|
|
|
21 |
|
|
Interest expense
|
|
|
(176 |
) |
|
|
(71 |
) |
|
Interest income
|
|
|
15 |
|
|
|
8 |
|
|
Other income, net
|
|
|
3 |
|
|
|
6 |
|
|
|
|
|
|
|
|
Earnings from continuing operations before tax and minority
interests
|
|
|
13 |
|
|
|
161 |
|
|
Income tax provision
|
|
|
(8 |
) |
|
|
(45 |
) |
|
|
|
|
|
|
|
Earnings from continuing operations before minority
interests
|
|
|
5 |
|
|
|
116 |
|
|
Minority interests
|
|
|
(25 |
) |
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) from continuing operations
|
|
|
(20 |
) |
|
|
116 |
|
|
Earnings from operation of discontinued operations
|
|
|
10 |
|
|
|
1 |
|
|
|
|
|
|
|
|
Net earnings (loss)
|
|
|
(10 |
) |
|
|
117 |
|
|
|
|
|
|
|
|
|
Cumulative declared and undeclared preferred stock dividend
|
|
|
(2 |
) |
|
|
(3 |
) |
|
|
|
|
|
|
|
Net earnings (loss) available to common shareholders
|
|
|
(12 |
) |
|
|
114 |
|
|
|
|
|
|
|
|
Earnings (loss) per common share basic:
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$ |
(0.15 |
) |
|
$ |
0.71 |
|
|
Discontinued operations
|
|
$ |
0.07 |
|
|
$ |
0.01 |
|
|
|
|
|
|
|
|
Net earnings (loss) available to common shareholders
|
|
$ |
(0.08 |
) |
|
$ |
0.72 |
|
|
|
|
|
|
|
|
Earnings (loss) per common share diluted:
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$ |
(0.15 |
) |
|
$ |
0.68 |
|
|
Discontinued operations
|
|
$ |
0.07 |
|
|
$ |
0.00 |
|
|
|
|
|
|
|
|
Net earnings (loss) available to common shareholders
|
|
$ |
(0.08 |
) |
|
$ |
0.68 |
|
|
|
|
|
|
|
|
Weighted average shares basic
|
|
|
141.7 |
|
|
|
158.6 |
|
Weighted average shares diluted
|
|
|
141.7 |
|
|
|
171.5 |
|
S-6
|
|
|
Consolidated Balance Sheets |
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, | |
|
March 31, | |
|
|
2005 | |
|
2006 | |
|
|
| |
|
| |
|
|
|
|
(unaudited) | |
|
|
(in millions) | |
ASSETS
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$ |
390 |
|
|
|
312 |
|
|
Restricted cash
|
|
|
|
|
|
|
42 |
|
|
Receivables:
|
|
|
|
|
|
|
|
|
|
|
Trade receivables, net
|
|
|
919 |
|
|
|
1,000 |
|
|
|
Other receivables
|
|
|
481 |
|
|
|
543 |
|
|
Inventories
|
|
|
661 |
|
|
|
678 |
|
|
Deferred income taxes
|
|
|
37 |
|
|
|
31 |
|
|
Other assets
|
|
|
91 |
|
|
|
78 |
|
|
|
|
|
|
|
|
Total current assets
|
|
|
2,579 |
|
|
|
2,684 |
|
|
|
|
|
|
|
|
|
Investments
|
|
|
775 |
|
|
|
793 |
|
|
Property, plant and equipment, net
|
|
|
2,040 |
|
|
|
2,035 |
|
|
Deferred income taxes
|
|
|
139 |
|
|
|
125 |
|
|
Other assets
|
|
|
482 |
|
|
|
469 |
|
|
Goodwill
|
|
|
949 |
|
|
|
928 |
|
|
Intangible assets, net
|
|
|
481 |
|
|
|
487 |
|
|
|
|
|
|
|
|
Total assets
|
|
|
7,445 |
|
|
|
7,521 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS EQUITY
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Short-term borrowings and current installments of long-term
debt third party and affiliates
|
|
|
155 |
|
|
|
212 |
|
|
Trade payable third parties and affiliates
|
|
|
811 |
|
|
|
750 |
|
|
Other current liabilities
|
|
|
787 |
|
|
|
762 |
|
|
Deferred income taxes
|
|
|
36 |
|
|
|
16 |
|
|
Income taxes payable
|
|
|
224 |
|
|
|
245 |
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
2,013 |
|
|
|
1,985 |
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
3,282 |
|
|
|
3,306 |
|
|
Deferred income taxes
|
|
|
285 |
|
|
|
287 |
|
|
Benefit obligations
|
|
|
1,126 |
|
|
|
1,116 |
|
|
Other liabilities
|
|
|
440 |
|
|
|
420 |
|
|
Minority interests
|
|
|
64 |
|
|
|
65 |
|
|
Shareholders equity:
|
|
|
|
|
|
|
|
|
|
|
Preferred stock
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
|
|
|
|
|
|
|
Additional paid-in capital
|
|
|
337 |
|
|
|
343 |
|
|
|
Retained earnings
|
|
|
24 |
|
|
|
132 |
|
|
|
Accumulated other comprehensive loss, net
|
|
|
(126 |
) |
|
|
(133 |
) |
|
|
|
|
|
|
|
|
|
Total shareholders equity
|
|
|
235 |
|
|
|
342 |
|
|
|
|
|
|
|
|
Total liabilities and shareholders equity
|
|
|
7,445 |
|
|
|
7,521 |
|
|
|
|
|
|
|
|
S-7
|
|
|
|
|
Segment
Data(1)
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months | |
|
|
Ended | |
|
|
March 31, | |
|
|
| |
|
|
2005 | |
|
2006 | |
|
|
| |
|
| |
|
|
(in millions, | |
|
|
except per share | |
|
|
data) | |
Net Sales
|
|
|
|
|
|
|
|
|
|
Chemical Products
|
|
|
1,044 |
|
|
|
1,169 |
|
|
Technical Polymers Ticona
|
|
|
239 |
|
|
|
231 |
|
|
Acetate Products
|
|
|
165 |
|
|
|
167 |
|
|
Performance Products
|
|
|
47 |
|
|
|
49 |
|
|
Other activities
|
|
|
12 |
|
|
|
61 |
|
|
Intersegment eliminations
|
|
|
(29 |
) |
|
|
(25 |
) |
|
|
|
|
|
|
|
Total
|
|
|
1,478 |
|
|
|
1,652 |
|
|
|
|
|
|
|
|
Operating Profit (Loss)
|
|
|
|
|
|
|
|
|
|
Chemical Products
|
|
|
177 |
|
|
|
162 |
|
|
Technical Polymers Ticona
|
|
|
39 |
|
|
|
41 |
|
|
Acetate Products
|
|
|
10 |
|
|
|
23 |
|
|
Performance Products
|
|
|
13 |
|
|
|
17 |
|
|
Other activities
|
|
|
(83 |
) |
|
|
(46 |
) |
|
|
|
|
|
|
|
Total
|
|
|
156 |
|
|
|
197 |
|
|
|
|
|
|
|
|
Equity Earnings and Other
Income/(Expenses)(2)
|
|
|
|
|
|
|
|
|
|
Chemical Products
|
|
|
14 |
|
|
|
9 |
|
|
Technical Polymers Ticona
|
|
|
12 |
|
|
|
14 |
|
|
Acetate Products
|
|
|
|
|
|
|
|
|
|
Performance Products
|
|
|
|
|
|
|
|
|
|
Other activities
|
|
|
(8 |
) |
|
|
4 |
|
|
|
|
|
|
|
|
Total
|
|
|
18 |
|
|
|
27 |
|
|
|
|
|
|
|
|
Depreciation and Amortization Expense
|
|
|
|
|
|
|
|
|
|
Chemical Products
|
|
|
34 |
|
|
|
38 |
|
|
Technical Polymers Ticona
|
|
|
15 |
|
|
|
16 |
|
|
Acetate Products
|
|
|
9 |
|
|
|
7 |
|
|
Performance Products
|
|
|
3 |
|
|
|
4 |
|
|
Other activities
|
|
|
2 |
|
|
|
5 |
|
|
|
|
|
|
|
|
Total
|
|
|
63 |
|
|
|
70 |
|
|
|
|
|
|
|
|
|
|
(1) |
Other Activities primarily includes corporate selling, general
and administrative expenses and the results from AT Plastics and
captive insurance companies. |
|
(2) |
Includes equity earnings from affiliates and other
income/(expense), which is primarily dividends from cost
investments. |
S-8
|
|
|
Factors Affecting First Quarter 2006 Segment Net Sales
Compared to First Quarter 2005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume | |
|
Price | |
|
Currency | |
|
Other(1) | |
|
Total | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
(in percent) | |
Chemical Products
|
|
|
(1 |
)% |
|
|
8 |
% |
|
|
(3 |
)% |
|
|
8 |
% |
|
|
12 |
% |
Technical Polymers Ticona
|
|
|
1 |
|
|
|
3 |
|
|
|
(5 |
) |
|
|
(2 |
) |
|
|
(3 |
) |
Acetate Products
|
|
|
(6 |
) |
|
|
7 |
|
|
|
0 |
|
|
|
0 |
|
|
|
1 |
|
Performance Products
|
|
|
23 |
|
|
|
(12 |
) |
|
|
(7 |
) |
|
|
0 |
|
|
|
4 |
|
|
|
(1) |
Primarily represents net sales of the Vinamul and Acetex
businesses, excluding AT Plastics and loss of sales related to
the COC divestiture (Ticona). |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume | |
|
Price | |
|
Currency | |
|
Other(1) | |
|
Total | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
(in percent) | |
Total Company
|
|
|
(1 |
)% |
|
|
6 |
% |
|
|
(3 |
)% |
|
|
10 |
% |
|
|
12 |
% |
|
|
|
|
|
|
|
|
|
|
|
Three Months | |
|
|
Ended | |
|
|
March 31, | |
|
|
| |
|
|
2005 | |
|
2006 | |
|
|
| |
|
| |
|
|
(in millions) | |
Dividends from equity investments
|
|
|
36 |
|
|
|
17 |
|
Dividends from cost investments
|
|
|
14 |
|
|
|
7 |
|
|
|
|
|
|
|
|
Total
|
|
|
50 |
|
|
|
24 |
|
|
|
|
|
|
|
|
S-9
THE OFFERING
|
|
|
Shares of Series A common stock offered by the selling
stockholders |
|
35,000,000 shares |
|
Selling stockholders |
|
Funds affiliated with The Blackstone Group, L.P. and a fund
affiliated with Bank of America Corporation. See Principal
and Selling Stockholders. |
|
Shares of Series A common stock outstanding before and
after this offering |
|
158,562,161 shares |
|
Use of proceeds |
|
We will not receive any of the proceeds from the sale of shares
of common stock by the selling stockholders identified in this
prospectus supplement. The selling stockholders will receive all
net proceeds from the sale of the shares of our common stock
offered by this prospectus supplement. |
|
Dividend policy |
|
Our board of directors adopted a policy of declaring, subject to
legally available funds, a quarterly cash dividend on each share
of our common stock at an annual rate initially equal to
approximately 1% of the $16 price per share in the initial
public offering of our Series A common stock (or
$0.16 per share) unless our board of directors, in its sole
discretion, determines otherwise, commencing the second quarter
of 2005. Pursuant to this policy, the Company has paid quarterly
dividends of $0.04 per share on August 11, 2005,
November 1, 2005, February 1, 2006 and May 1,
2006. However, there is no assurance that sufficient cash will
be available in the future to pay such dividend. Further, such
dividends payable to holders of our Series A common stock
dividend cannot be declared or paid nor can any funds be set
aside for the payment thereof, unless we have paid or set aside
funds for the payment of all accumulated and unpaid dividends
with respect to the shares of our preferred stock, as described
below. |
|
|
|
Our board of directors may, at any time, modify or revoke our
dividend policy on our Series A common stock. |
|
|
|
We are required under the terms of our existing perpetual
preferred stock to pay scheduled quarterly dividends, subject to
legally available funds. See Dividend Policy. |
|
New York Stock Exchange symbol |
|
CE |
S-10
Unless we specifically state otherwise, all information in this
prospectus supplement:
|
|
|
|
|
assumes no exercise by the underwriter of its over-allotment
option to purchase 5,250,000 additional shares of common stock
in this offering; and |
|
|
|
excludes: |
|
|
|
|
|
11,252,972 shares of Series A common stock reserved
for issuance upon exercise of options granted to certain of our
executive officers, key employees and directors; |
|
|
|
2,468,546 additional shares of Series A common stock
reserved for issuance in connection with our equity incentive
plans; and |
|
|
|
15,000,000 shares of Series A common stock reserved
for issuance upon conversion of our existing convertible
perpetual preferred stock. |
RISK FACTORS
Investing in our Series A common stock involves substantial
risk. You should carefully consider all the information included
or incorporated by reference in this prospectus supplement and
the accompanying prospectus prior to investing in our
Series A common stock. In particular, we urge you to
consider carefully the factors set forth herein and in our
incorporated documents under the heading Risk
Factors.
S-11
RISK FACTORS
An investment in our Series A common stock involves
risks. You should carefully consider the risks relating to our
Series A common stock below, together with the other Risk
Factors and other information included in the accompanying
prospectus and our incorporated documents, before investing in
our Series A common stock.
Risks Related to Our Company
Upon completion of this offering, we will no longer be a
controlled company within the meaning of the New
York Stock Exchange rules; however, we will be permitted to
phase in certain corporate governance requirements over the
course of 12 months.
Upon completion of this offering, affiliates of the Sponsor will
control less than a majority of the voting power of our
outstanding common stock. As a result, we no longer will be a
controlled company within the meaning of the New
York Stock Exchange rules and, thus, will be required to have a
board of directors comprised of a majority of independent
directors and nominating and compensation committees composed
entirely of independent directors. However, we will be permitted
to phase in these corporate governance requirements over the
course of 12 months.
Under the New York Stock Exchange rules, the Compensation
Committee and Nominating and Corporate Governance Committee each
will be required to (1) have one independent director upon
the completion of this offering, (2) have a majority of
independent directors within 90 days of the completion of
this offering and (3) be comprised entirely of independent
directors within one year of the completion of this offering. In
addition, our Board of Directors will be required to be
comprised of a majority of independent directors within one year
of the completion of this offering.
Accordingly, during the course of this phase-in period, you will
not have the same protections afforded to shareholders of
companies that are subject to all of the New York Stock Exchange
corporate governance requirements.
Because our Sponsor will continue to be able to
significantly influence us after this offering, the influence of
our public shareholders over significant corporate actions may
be limited, and conflicts of interest between our Sponsor and us
or you could arise in the future.
Assuming the selling stockholders sell 35,000,000 shares of
our Series A common stock in the Transactions, our Sponsor
would beneficially own (or have a right to acquire)
approximately 31.7% of our outstanding Series A common
stock (approximately 28.6% of our outstanding Series A
common stock if the selling stockholders sell
40,250,000 shares). Under the terms of the
stockholders agreement between us and certain of the
Original Shareholders that are affiliates of the Sponsor, such
Original Shareholders are also entitled to designate all
nominees for election to our board of directors for so long as
they hold at least 25% of the total voting power of our
Series A common stock. Thereafter, although our Sponsor
will not have an explicit contractual right to do so, it may
still nominate directors in its capacity as a stockholder. See
Certain Relationships and Related Party
TransactionsShareholders Agreement in our
Annual Report on
Form 10-K for the
fiscal year ended December 31, 2005, which is incorporated
by reference herein. As a result, our Sponsor, through its
control over the composition of our board of directors and its
control of a significant percentage of the voting power of our
Series A common stock, will continue to have significant
influence or effective control over our decisions to enter into
any corporate transaction and will have the ability to prevent
any transaction that requires the approval of equityholders,
regardless of whether or not other equityholders believe that
any such transaction is in their own best interests. For
example, our Sponsor effectively could cause us to make
acquisitions that increase our indebtedness or to sell
revenue-generating assets. Additionally, our Sponsor is in the
business of making investments in companies and may from time to
time acquire and hold interests in businesses that compete
directly or indirectly with us. Our Sponsor may also pursue
acquisition opportunities that may be complementary to our
business, and as a result, those acquisition opportunities may
not be available to us. So long as our Sponsor continues to own
a significant amount of our equity, it will continue to be able
to significantly influence or effectively control our decisions.
S-12
Our second amended and restated certificate of incorporation
renounces any interest or expectancy that we have in, or right
to be offered an opportunity to participate in, specified
business opportunities. The second amended and restated
certificate of incorporation further provides that none of the
Original Shareholders (including the Sponsor) or their
affiliates or any director who is not employed by Celanese
(including any non-employee director who serves as one of our
officers in both his director and officer capacities) or his or
her affiliates has any duty to refrain from (i) engaging in
a corporate opportunity in the same or similar lines of business
in which we or our affiliates now engage or propose to engage or
(ii) otherwise competing with us. In addition, in the event
that any of the Original Shareholders (including the Sponsor) or
any non-employee director acquires knowledge of a potential
transaction or other business opportunity which may be a
corporate opportunity for itself or himself or its or his
affiliates and for Celanese or its affiliates, such Original
Shareholder or non-employee director has no duty to communicate
or offer such transaction or business opportunity to Celanese
Corporation or us and may take any such opportunity for
themselves or offer it to another person or entity.
The disposition by the Original Blackstone Shareholders of
at least 90% of their equity interest will satisfy a vesting
condition under our deferred compensation plan.
In December 2004, we approved, among other incentive and
retention programs, a deferred compensation plan for executive
officers and key employees. The programs were intended to align
management performance with the creation of shareholder value.
The deferred compensation plan has an aggregate maximum amount
payable of $192 million over five years ending in 2009. The
initial component of the deferred compensation plan vested in
2004 and was paid in the first quarter of 2005. The remaining
aggregate maximum amount payable of $163 million is subject
to downward adjustment if the price of our Series A common
stock falls below the January 2005 initial public offering price
of $16.00 and vests as follows: (i) a portion (ranging from
26% to 37%, depending on the participant) will vest annually
over the next four years based on continued employment with us
and the occurrence of a sale or other disposition by the
Original Blackstone Shareholders of at least 90% of its equity
interest in us, in which the Original Blackstone Shareholders
receive at least a 25% cash internal rate of return on their
equity interest (a Qualifying Sale) and
(ii) the balance of the remaining amount payable will vest
annually based on the achievement of specified performance
criteria, including meeting annual earnings and cash flow
targets, and the occurrence of a Qualifying Sale. After this
offering the Original Blackstone Shareholders will have an
equity interest of approximately 31.7%. At this point, it is
likely that a disposition by the Original Blackstone
Shareholders of at least 90% of their equity interest will be a
Qualifying Sale. Upon the occurrence of a Qualifying Sale, the
amount vested and payable under the plan for 2005 would be
approximately $50 million.
Risks Related to our Series A Common Stock
Future sales of our shares could depress the market price
of our common stock.
The market price of our Series A common stock could decline
as a result of sales of a large number of shares of
Series A common stock in the market after the offering or
the perception that such sales could occur. These sales, or the
possibility that these sales may occur, also might make it more
difficult for us to sell equity securities in the future at a
time and at a price that we deem appropriate. See Shares
Eligible For Future Sale.
In connection with these offerings, we, our executive officers
and directors and the Original Shareholders have agreed with the
underwriter not to sell, dispose of or hedge any shares of our
Series A common stock or securities convertible into or
exchangeable for shares of our Series A common stock, other
than the securities offered this offering and subject to
specified exceptions, during the 60-day period beginning from
the latter of the date of this prospectus supplement, except
with the prior written consent of the underwriter.
Subject to any anti-dilution adjustments, an additional
12,000,000 shares of our Series A common stock will be
issuable upon conversion of the shares of our existing
4.25% convertible perpetual preferred stock. We have
reserved for issuance the maximum number of shares of our
Series A common stock issuable upon conversion of our
existing 4.25% convertible perpetual preferred stock. See
Description of Existing Convertible Perpetual Preferred
Stock.
S-13
The terms of our outstanding indebtedness and Delaware law
may restrict us from paying cash dividends on our Series A
common stock.
The terms of our senior credit facilities and the indentures
governing our senior subordinated notes and senior discount
notes limit our ability to pay cash dividends on any shares of
our capital stock, including our Series A common stock. In
addition, the certificate of designations relating to our
existing 4.25% convertible perpetual preferred stock limits
our ability to pay cash dividends on shares of our capital stock
that rank junior to or on parity with our classes of preferred
stock in certain circumstances. See Description of
Mandatory Convertible Preferred Stock Voting
Rights. In the future, we may agree to further
restrictions on our ability to pay dividends. To maintain our
credit ratings, we may be limited in our ability to pay
dividends so that we can maintain an appropriate level of debt.
In addition, Delaware law provides that we may pay dividends on
our Series A common stock only out of our surplus, or, if
there is no surplus, the amount of our net profits for the
fiscal year in which the dividend occurs and/or the preceding
fiscal year. Our future dividend policy depends on earnings,
financial condition, liquidity, capital requirements and other
factors. There is no guarantee that we will pay dividends on
shares of our Series A common stock.
Our ability to issue additional series of shares of our
preferred stock in the future could adversely affect the rights
of holders of our Series A common stock.
Our board of directors is authorized to issue additional classes
or series of shares of our preferred stock without any action on
the part of our stockholders. Our board of directors also has
the power, without stockholder approval, to set the terms of any
such classes or series of shares of our preferred stock that may
be issued, including voting rights, conversion rights, dividend
rights, preferences over our Series A common stock with
respect to dividends or if we liquidate, dissolve or wind up our
business and other terms. If we issue shares of our preferred
stock in the future that have preference over our Series A
common stock with respect to the payment of dividends or upon
our liquidation, dissolution or winding up, or if we issue
shares of our preferred stock with voting rights that dilute the
voting power of our Series A common stock, the market price
of our Series A common stock could decrease.
The market price of our Series A common stock may be
volatile, which could cause the value of our investment to
decline.
Securities markets worldwide experience significant price and
volume fluctuations. This market volatility, as well as general
economic, market or potential conditions, could reduce the
market price of the Series A common stock in spite of our
operating performance. In addition, our operating results could
be below the expectations of public market analysts and
investors, and in response, the market price of our
Series A common stock could decrease significantly.
Provisions in our second amended and restated certificate
of incorporation and by-laws, as well as any shareholders
rights plans, may discourage a takeover attempt.
Provisions contained in our second amended and restated
certificate of incorporation and by-laws could make it more
difficult for a third party to acquire us, even if doing so
might be beneficial to our shareholders. Provisions of our
second amended and restated certificate of incorporation and
by-laws impose various procedural and other requirements, which
could make it more difficult for shareholders to effect certain
corporate actions. For example, our second amended and restated
certificate of incorporation authorizes our board of directors
to determine the rights, preferences, privileges and
restrictions of unissued series of preferred stock, without any
vote or action by our shareholders. Thus, our board of directors
can authorize and issue shares of preferred stock with voting or
conversion rights that could adversely affect the voting or
other rights of holders of our Series A common stock. These
rights may have the effect of delaying or deterring a change of
control of our company. In addition, a change of control of our
company may be delayed or deterred as a result of our having
three classes of directors (each class elected for a three-year
term) or as a result of any shareholders rights plan that
our board of directors may adopt. In addition, we would be
required to issue additional shares of our Series A common
stock to holders of the preferred stock who convert following a
fundamental change. See Description of Existing
Convertible Perpetual Preferred Stock in the accompanying
prospectus. These provisions could limit the price that certain
investors might be
S-14
willing to pay in the future for shares of our Series A
common stock. See Description of Capital Stock in
the accompanying prospectus.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement, the accompanying prospectus and the
documents incorporated herein by reference contain certain
forward-looking statements and information relating to us that
are based on the beliefs of our management as well as
assumptions made by, and information currently available to, us.
These statements include, but are not limited to, statements
about our strategies, plans, objectives, expectations,
intentions, expenditures, and assumptions and other statements
contained in this prospectus supplement that are not historical
facts. When used in this document, words such as
anticipate, believe,
estimate, expect, intend,
plan and project and similar
expressions, as they relate to us are intended to identify
forward-looking statements. These statements reflect our current
views with respect to future events, are not guarantees of
future performance and involve risks and uncertainties that are
difficult to predict. Further, certain forward-looking
statements are based upon assumptions as to future events that
may not prove to be accurate.
As used in this prospectus supplement, the term Domination
Agreement refers to the domination and profit and loss
transfer agreement between CAG and our subsidiary, Celanese
Europe Holding GmbH & Co. KG, formerly known as BCP
Crystal Acquisition GmbH & Co. KG, a German limited
partnership (Kommanditgesellschaft, KG) (the
Purchaser), pursuant to which the Purchaser became
obligated on October 1, 2004 to offer to acquire all
outstanding ordinary shares of CAG from the minority
shareholders of CAG in return for payment of fair cash
compensation in accordance with German law. Celanese AG is
incorporated as a stock corporation (Aktiengesellschaft,
AG) organized under the laws of the Federal Republic of Germany.
As used in this prospectus supplement, the term CAG
refers to (i) prior to the organizational restructuring of
Celanese and certain of its subsidiaries in October 2004 (the
Restructuring), Celanese AG and Celanese Americas
Corporation, their consolidated subsidiaries, their
non-consolidated subsidiaries, ventures and other investments,
and (ii) following the Restructuring, Celanese AG, its
consolidated subsidiaries, its non-consolidated subsidiaries,
ventures and other investments, except that with respect to
shareholder and similar matters where the context indicates,
CAG refers to Celanese AG.
As used in this prospectus supplement, the term
Sponsor refers to The Blackstone Group. The term
Original Blackstone Shareholders refers to
Blackstone Capital Partners (Cayman) Ltd. 1, Blackstone
Capital Partners (Cayman) Ltd. 2 and Blackstone Capital
Partners (Cayman) Ltd. 3, and Original
Shareholders refers to the Original Blackstone
Shareholders and BA Capital Investors Sidecar Fund, L.P.
As used in this document, the term second amended and
restated certificate of incorporation refers to our Second
Amended and Restated Certificate of Incorporation. As used in
this prospectus supplement, the term by-laws refers
to our Amended and Restated By-laws.
Many factors could cause our actual results, performance or
achievements to be materially different from any future results,
performance or achievements that may be expressed or implied by
such forward-looking statements. These factors include, among
other things:
|
|
|
|
|
changes in general economic, business, political and regulatory
conditions in the countries or regions in which we operate; |
|
|
|
the length and depth of product and industry business cycles
particularly in the automotive, electrical, electronics and
construction industries; |
|
|
|
changes in the price and availability of raw materials,
particularly changes in the demand for, supply of, and market
prices of fuel oil, natural gas, coal, electricity and
petrochemicals such as ethylene, propylene and butane, including
changes in production quotas in OPEC countries and the
deregulation of the natural gas transmission industry in Europe; |
|
|
|
the ability to pass increases in raw material prices on to
customers or otherwise improve margins through price increases; |
S-15
|
|
|
|
|
the ability to maintain plant utilization rates and to implement
planned capacity additions and expansions; |
|
|
|
the ability to reduce production costs and improve productivity
by implementing technological improvements to existing plants; |
|
|
|
the existence of temporary industry surplus production capacity
resulting from the integration and
start-up of new
world-scale plants; |
|
|
|
increased price competition and the introduction of competing
products by other companies; |
|
|
|
the ability to develop, introduce and market innovative
products, product grades and applications, particularly in the
Ticona and Performance Products segments of our business; |
|
|
|
changes in the degree of patent and other legal protection
afforded to our products; |
|
|
|
compliance costs and potential disruption or interruption of
production due to accidents or other unforeseen events or delays
in construction of facilities; |
|
|
|
potential liability for remedial actions under existing or
future environmental regulations; |
|
|
|
potential liability resulting from pending or future litigation,
or from changes in the laws, regulations or policies of
governments or other governmental activities in the countries in
which we operate; |
|
|
|
changes in currency exchange rates and interest rates; |
|
|
|
changes in the composition or restructuring of us or our
subsidiaries and the successful completion of acquisitions,
divestitures and venture activities; |
|
|
|
inability to successfully integrate current and future
acquisitions; |
|
|
|
pending or future challenges to the Domination
Agreement; and |
|
|
|
various other factors, both referenced and not referenced in
this prospectus supplement. |
Many of these factors are macroeconomic in nature and are,
therefore, beyond our control. Should one or more of these risks
or uncertainties materialize, or should underlying assumptions
prove incorrect, our actual results, performance or achievements
may vary materially from those described in this prospectus
supplement, the accompanying prospectus and the documents
incorporated herein by reference as anticipated, believed,
estimated, expected, intended, planned or projected. We neither
intend nor assume any obligation to update these forward-looking
statements, which speak only as of their dates.
S-16
USE OF PROCEEDS
The selling stockholders will receive all proceeds from the sale
of the shares of our Series A common stock in this
offering. We will not receive any of the proceeds from the sale
of shares of our Series A common stock by the selling
stockholders, including any sales pursuant to the over-allotment
option, if any. We will pay all expenses (other than transfer
taxes) of the selling stockholders in connection with this
offering.
PRICE RANGE OF COMMON STOCK
Our Series A common stock has traded on the New York Stock
Exchange under the symbol CE since January 21,
2005. The following table sets forth the high and low intraday
sales prices per share of our common stock, as reported by the
New York Stock Exchange, for the periods indicated.
|
|
|
|
|
|
|
|
|
|
|
Price Range | |
|
|
| |
|
|
High | |
|
Low | |
|
|
| |
|
| |
2005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended March 31, 2005
|
|
$ |
18.65 |
|
|
$ |
15.10 |
|
Quarter ended June 30, 2005
|
|
$ |
18.16 |
|
|
$ |
13.54 |
|
Quarter ended September 30, 2005
|
|
$ |
20.06 |
|
|
$ |
15.88 |
|
Quarter ended December 31, 2005
|
|
$ |
19.76 |
|
|
$ |
15.58 |
|
2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended March 31, 2006
|
|
$ |
22.00 |
|
|
$ |
18.90 |
|
Quarter ending June 30, 2006 (through May 9, 2006)
|
|
$ |
22.73 |
|
|
$ |
19.94 |
|
The closing sale price of our Series A common stock, as
reported by the New York Stock Exchange, on May 9, 2006 was
$22.42. As of May 9, 2006, there were 51 holders of
record of our Series A common stock.
DIVIDEND POLICY
In July 2005, our board of directors adopted a policy of
declaring, subject to legally available funds, a quarterly cash
dividend on each share of our common stock at an annual rate
initially equal to approximately 1% of the $16 price per share
in the initial public offering of our Series A common stock
(or $0.16 per share) unless our board of directors, in its
sole discretion, determines otherwise, commencing the second
quarter of 2005. Pursuant to this policy, the Company paid
quarterly dividends of $0.04 per share on August 11,
2005, November 1, 2005, February 1, 2006 and
May 1, 2006. Based on the number of outstanding shares of
our Series A common stock, the anticipated annual cash
dividend is approximately $25 million. However, there is no
assurance that sufficient cash will be available in the future
to pay such dividend. Further, such dividends payable to holders
of our Series A common stock dividend cannot be declared or
paid nor can any funds be set aside for the payment thereof,
unless we have paid or set aside funds for the payment of all
accumulated and unpaid dividends with respect to the shares of
our preferred stock, as described below.
Our board of directors may, at any time, modify or revoke our
dividend policy on our Series A common stock.
We are required under the terms of our preferred stock to pay
scheduled quarterly dividends, subject to legally available
funds. For so long as the preferred stock remains outstanding,
(1) we will not declare, pay or set apart funds for the
payment of any dividend or other distribution with respect to
any junior stock or parity stock and (2) neither we, nor
any of our subsidiaries, will, subject to certain exceptions,
redeem, purchase or otherwise acquire for consideration junior
stock or parity stock through a sinking fund or otherwise, in
each case unless we have paid or set apart funds for the payment
of all accumulated and unpaid dividends with respect to the
shares of preferred stock and any parity stock for all preceding
dividend periods. Pursuant to this policy, the Company paid the
quarterly dividends of $0.265625 on its existing
4.25% convertible
S-17
perpetual preferred stock on August 1, 2005,
November 1, 2005 and February 1, 2006. The anticipated
annual cash dividend is approximately $10 million.
The amounts available to us to pay cash dividends is restricted
by our subsidiaries debt agreements. The indentures
governing the senior subordinated notes and the senior discount
notes also limit, but do not prohibit, the ability of BCP
Crystal US Holdings Corp. (BCP Crystal),
Crystal US Holdings 3 L.L.C. and their respective
subsidiaries to pay dividends. Any decision to declare and pay
dividends in the future will be made at the discretion of our
board of directors and will depend on, among other things, our
results of operations, cash requirements, financial condition,
contractual restrictions and other factors that our board of
directors may deem relevant.
Under the Domination Agreement, any minority shareholder of
Celanese AG who elects not to sell its shares to the Purchaser
will be entitled to remain a shareholder of Celanese AG and to
receive a gross guaranteed fixed annual payment on their shares
(Ausgleich) of
3.27 per Celanese Share less certain corporate taxes
to be paid by Celanese AG in lieu of any future dividend.
Under Delaware law, our board of directors may declare dividends
only to the extent of our surplus (which is defined
as total assets at fair market value minus total liabilities,
minus statutory capital), or if there is no surplus, out of our
net profits for the then current and/or immediately preceding
fiscal years. The value of a corporations assets can be
measured in a number of ways and may not necessarily equal their
book value. The value of our capital may be adjusted from time
to time by our board of directors but in no event will be less
than the aggregate par value of our issued stock. Our board of
directors may base this determination on our financial
statements, a fair valuation of our assets or another reasonable
method. Our board of directors will seek to assure itself that
the statutory requirements will be met before actually declaring
dividends. In future periods, our board of directors may seek
opinions from outside valuation firms to the effect that our
solvency or assets are sufficient to allow payment of dividends,
and such opinions may not be forthcoming. If we sought and were
not able to obtain such an opinion, we likely would not be able
to pay dividends. In addition, pursuant to the terms of our
preferred stock, we are prohibited from paying a dividend on our
Series A common stock unless all payments due and payable
under the preferred stock have been made.
S-18
CAPITALIZATION
The following table sets forth our capitalization as of
March 31, 2006.
You should read the information in this table in conjunction
with our financial statements and the notes to those statements,
Selected Historical Financial Data and
Managements Discussion and Analysis of Financial
Condition and Results of Operations in our incorporated
documents.
|
|
|
|
|
|
|
|
|
As of | |
|
|
March 31, 2006 | |
|
|
| |
|
|
Actual | |
|
|
| |
|
|
(in millions) | |
Cash and cash
equivalents(1)
|
|
$ |
312 |
|
|
|
|
|
Total debt:
|
|
|
|
|
|
Amended and restated senior credit facilities:
|
|
|
|
|
|
|
Revolving credit
facilities(2)
|
|
$ |
|
|
|
|
Term loan facility
|
|
|
1,712 |
|
|
Senior subordinated
notes(3)
|
|
|
957 |
|
|
Senior discount notes
|
|
|
388 |
|
|
Other debt
|
|
|
461 |
|
|
|
|
|
|
|
Total debt
|
|
|
3,518 |
|
|
|
|
|
Minority interest
|
|
|
65 |
|
Shareholders equity:
|
|
|
|
|
|
Preferred stock, $0.01 par value, 100,000,000 shares
authorized and 9,600,000 issued and outstanding as of
March 31,
2006(4)
|
|
|
|
|
|
Series A common stock, $0.0001 par value,
400,000,000 shares authorized and 158,562,161 issued and
outstanding as of March 31, 2006
|
|
|
|
|
|
Additional paid-in capital
|
|
|
343 |
|
|
Retained earnings (deficit)
|
|
|
132 |
|
|
Accumulated other comprehensive (loss)
|
|
|
(133 |
) |
|
|
|
|
|
Total shareholders equity
|
|
|
342 |
|
|
|
|
|
|
Total capitalization
|
|
|
3,925 |
|
|
|
|
|
|
|
(1) |
Represents cash available to make acquisitions, to repay
additional existing indebtedness, to pay interest on debt, to
pay dividends and to make loans to its subsidiaries for working
capital and general corporate purposes. |
|
(2) |
The revolving credit facilities under the amended and restated
senior credit facilities provide for borrowings of up to
$600 million. As of May 8, 2006, no amounts have been
borrowed and $532 million was available for borrowings
under the revolving credit facilities (taking into account
letters of credit issued under the revolving credit facilities). |
|
(3) |
Includes the U.S. dollar equivalent of the euro-denominated
notes and $3 million premium on the $225 million
aggregate principal amount of the notes issued July 1, 2004. |
|
(4) |
4.25% convertible perpetual preferred stock, which has an
aggregate liquidation preference of $240 million. |
S-19
PRINCIPAL AND SELLING STOCKHOLDERS
The following table sets forth information with respect to the
number of shares to be sold in this offering and the beneficial
ownership of common stock of Celanese Corporation on an actual
basis and after giving effect to this offering, by (i) each
person known to own beneficially more than 5% of common stock of
Celanese Corporation, (ii) each of the directors of
Celanese Corporation, (iii) each of the named executive
officers of Celanese Corporation, (iv) all directors and
executive officers as a group, and (v) each selling
stockholder.
Each selling stockholder purchased shares of our Series A
Common Stock in the ordinary course of business and, at the time
of such purchase, had no agreements or understandings, directly
or indirectly, with any person to distribute such securities.
The number of shares outstanding and the percentages of
beneficial ownership are based on 158,562,161 shares of
common stock of Celanese Corporation issued and outstanding as
of May 9, 2006.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount and Nature of Beneficial Ownership of Common Stock(1) | |
|
|
|
|
| |
|
|
|
|
|
|
Rights to | |
|
|
|
|
|
|
|
|
Acquire | |
|
Total | |
|
Percentage of | |
|
|
|
Percentage of | |
|
|
Common | |
|
Shares of | |
|
Common | |
|
Common | |
|
Shares of | |
|
Common | |
|
Common | |
|
|
Stock | |
|
Common | |
|
Stock | |
|
Stock | |
|
Common | |
|
Stock | |
|
Stock | |
|
|
Beneficially | |
|
Stock | |
|
Beneficially | |
|
Beneficially | |
|
Stock | |
|
Beneficially | |
|
Beneficially | |
|
|
Owned | |
|
Prior to | |
|
Owned | |
|
Owned | |
|
to be Sold | |
|
Owned | |
|
Owned | |
Name of |
|
Prior to | |
|
this | |
|
Prior to | |
|
Prior to | |
|
in this | |
|
After | |
|
After this | |
Beneficial Owner |
|
this Offering | |
|
Offering | |
|
this Offering | |
|
this Offering | |
|
Offering | |
|
this Offering | |
|
Offering | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Blackstone Capital Partners (Cayman) Ltd.
1(3)
|
|
|
51,167,472 |
|
|
|
|
|
|
|
51,167,472 |
|
|
|
32.3 |
% |
|
|
20,093,168 |
|
|
|
31,074,304 |
|
|
|
19.60 |
% |
Blackstone Capital Partners (Cayman) Ltd.
2(3)
|
|
|
3,548,611 |
|
|
|
|
|
|
|
3,548,611 |
|
|
|
2.2 |
% |
|
|
1,393,519 |
|
|
|
2,155,092 |
|
|
|
1.36 |
% |
Blackstone Capital Partners (Cayman) Ltd.
3(3)
|
|
|
27,819,502 |
|
|
|
|
|
|
|
27,819,502 |
|
|
|
17.5 |
% |
|
|
10,924,556 |
|
|
|
16,894,946 |
|
|
|
10.66 |
% |
BA Capital Investors Sidecar Fund,
L.P.(4)
|
|
|
6,592,300 |
|
|
|
|
|
|
|
6,592,300 |
|
|
|
4.2 |
% |
|
|
2,588,757 |
|
|
|
4,003,542 |
|
|
|
2.52 |
% |
Stephen A.
Schwarzman(3)
|
|
|
82,535,584 |
|
|
|
61,555 |
|
|
|
82,597,139 |
|
|
|
52.1 |
% |
|
|
|
|
|
|
50,185,896 |
|
|
|
31.7 |
% |
Peter G.
Peterson(3)
|
|
|
82,535,584 |
|
|
|
61,555 |
|
|
|
82,597,139 |
|
|
|
52.1 |
% |
|
|
|
|
|
|
50,185,896 |
|
|
|
31.7 |
% |
FMR
Corp.(5)
|
|
|
24,282,436 |
|
|
|
|
|
|
|
24,282,436 |
|
|
|
15.3 |
% |
|
|
|
|
|
|
24,282,436 |
|
|
|
15.3 |
% |
David N.
Weidman(6)
|
|
|
619,564 |
|
|
|
1,291,121 |
|
|
|
1,910,685 |
|
|
|
1.2 |
% |
|
|
|
|
|
|
1,910,685 |
|
|
|
1.2 |
% |
John J. Gallagher
III(6)
|
|
|
37,000 |
|
|
|
124,100 |
|
|
|
161,100 |
|
|
|
(2 |
) |
|
|
|
|
|
|
161,100 |
|
|
|
(2 |
) |
Lyndon E.
Cole(6)
|
|
|
242,222 |
|
|
|
504,751 |
|
|
|
746,973 |
|
|
|
(2 |
) |
|
|
|
|
|
|
746,973 |
|
|
|
(2 |
) |
Andreas
Pohlmann(6)
|
|
|
199,478 |
|
|
|
415,677 |
|
|
|
615,155 |
|
|
|
(2 |
) |
|
|
|
|
|
|
615,155 |
|
|
|
(2 |
) |
Curtis S.
Shaw(6)
|
|
|
27,100 |
|
|
|
130,000 |
|
|
|
157,100 |
|
|
|
(2 |
) |
|
|
|
|
|
|
157,100 |
|
|
|
(2 |
) |
Chinh E.
Chu(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
(2 |
) |
John M.
Ballbach(6)
|
|
|
23,598 |
|
|
|
12,311 |
|
|
|
35,909 |
|
|
|
(2 |
) |
|
|
|
|
|
|
35,909 |
|
|
|
(2 |
) |
James E.
Barlett(6)
|
|
|
8,598 |
|
|
|
12,311 |
|
|
|
20,909 |
|
|
|
(2 |
) |
|
|
|
|
|
|
20,909 |
|
|
|
(2 |
) |
Benjamin J.
Jenkins(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
(2 |
) |
William H.
Joyce(6)
|
|
|
28,598 |
|
|
|
12,311 |
|
|
|
40,909 |
|
|
|
(2 |
) |
|
|
|
|
|
|
40,909 |
|
|
|
(2 |
) |
Anjan
Mukherjee(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
(2 |
) |
Paul H.
ONeill(6)
|
|
|
3,598 |
|
|
|
12,311 |
|
|
|
15,909 |
|
|
|
(2 |
) |
|
|
|
|
|
|
15,909 |
|
|
|
(2 |
) |
James A.
Quella(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
(2 |
) |
Daniel S.
Sanders(6)
|
|
|
13,598 |
|
|
|
12,311 |
|
|
|
25,909 |
|
|
|
(2 |
) |
|
|
|
|
|
|
25,909 |
|
|
|
(2 |
) |
All directors and executive officers as a group (18 persons)
|
|
|
1,239,254 |
|
|
|
2,662,969 |
|
|
|
3,902,223 |
|
|
|
2.4 |
% |
|
|
|
|
|
|
3,902,223 |
|
|
|
2.4 |
% |
|
|
(1) |
All information in this table assumes no exercise by the
underwriter of its over-allotment option, if any. Following the
payment of a special dividend to holders of Celanese
Corporations Series B common stock in April 2005, all
outstanding shares of Series B common stock automatically
converted into shares of Celanese Corporations
Series A common stock pursuant to our second amended and
restated certificate of incorporation. As a result, Celanese
Corporation currently has no Series B common stock
outstanding. In addition, Celanese Corporation has
9,600,000 shares of issued and outstanding
4.25% convertible perpetual preferred stock which are
convertible into shares of Series A common stock at any
time at a conversion rate of 1.25 shares of Series A
common stock for each share of preferred stock, subject to
adjustments. The rights to acquire shares of common stock relate
to the rights to acquire within 60 days of October 26,
2005, the identified number of shares of common stock underlying
the vested stock options held by directors, executive officers
and Blackstone Management Partners IV, LLC. |
S-20
|
|
(2) |
Less than 1 percent of shares of common stock outstanding
(excluding, in the case of all directors and executive officers
individually and as a group, shares beneficially owned by the
affiliates of The Blackstone Group and BA Capital Investors
Sidecar Fund, L.P., respectively). |
|
(3) |
Blackstone Capital Partners (Cayman) Ltd. 1 (Cayman
1), Blackstone Capital Partners (Cayman) Ltd. 2
(Cayman 2), and Blackstone Capital Partners (Cayman)
Ltd. 3 (Cayman 3 and collectively with Cayman 1 and
Cayman 2, the Cayman Entities) are affiliates
of the Blackstone Group. The Cayman Entities and BA Capital
Investors Sidecar Fund L.P. are the only selling
stockholders in this offering. Blackstone Capital Partners
(Cayman) IV L.P. (BCP IV) owns 100% of Cayman 1.
Blackstone Family Investment Partnership (Cayman) IV-A L.P.
(BFIP) and Blackstone Capital Partners (Cayman) IV-A
L.P. (BCP IV-A) collectively own 100% of Cayman 2.
Blackstone Chemical Coinvest Partners (Cayman) L.P.
(BCCP and, collectively with BCP IV, BFIP and BCP
IV-A, the Blackstone Funds) owns 100% of Cayman 3.
Blackstone Management Associates (Cayman) IV L.P.
(BMA) is the general partner of each of the
Blackstone Funds. Blackstone LR Associates (Cayman) IV Ltd.
(BLRA) is the general partner of BMA and may,
therefore, be deemed to have shared voting and investment power
over shares of common stock of Celanese Corporation.
Mr. Chu, who serves as a Director of Celanese Corporation
and is a member of the supervisory board of CAG, is a
non-controlling shareholder of BLRA and disclaims any beneficial
ownership of shares of common stock of Celanese Corporation
beneficially owned by BLRA. Messrs. Peter G. Peterson and
Stephen A. Schwarzman are directors and controlling persons of
BLRA and as such may be deemed to share beneficial ownership of
shares of common stock of Celanese Corporation controlled by
BLRA. Each of BLRA and Messrs. Peterson and Schwarzman
disclaims beneficial ownership of such shares. On
January 25, 2005, Celanese Corporation issued to Blackstone
Management Partners IV L.L.C. (in lieu of granting such
options to Directors of Celanese Corporation who are employees
of The Blackstone Group in connection with Celanese
Corporations regular director compensation arrangements)
options to acquire an aggregate of 123,110 shares of
Series A common stock, of which options to acquire
61,555 shares are currently exercisable.
Messrs. Peterson and Schwarzman are controlling persons of
Blackstone Management Partners IV L.L.C. and accordingly
may be deemed to beneficially own the shares subject to such
options. The exercise price for such options is $16 per
share. The address of each of the Cayman Entities, the
Blackstone Funds, BMA and BLRA is c/o Walkers SPV Limited,
P.O. Box 908 GT, George Town, Grand Cayman. The address of
each of Messrs. Peterson and Schwarzman is c/o The
Blackstone Group, 345 Park Avenue, New York, NY 10154. |
|
(4) |
BA Capital Investors Sidecar Fund, L.P. (BACI) owns
4.2% of Celanese Corporation. BACI is an affiliate of Bank of
America Corporation. BA Capital Management Sidecar, L.P., a
Cayman Islands limited partnership (BACI
Management), as the general partner of BACI, has the power
to vote and dispose of securities held by BACI and may therefore
be deemed to have shared voting and dispositive power over the
shares of common stock that BACI may be deemed to beneficially
own. BACM I Sidecar GP Limited, a Cayman Islands limited
liability exempted company (BACM I), as the general
partner of BACI Management, has the shared power to vote and
dispose of securities held by BACI Management and may therefore
be deemed to have shared voting and dispositive power over the
shares of common stock that BACI may be deemed to beneficially
own. J. Travis Hain, an employee of Bank of America, National
Association, is the managing member of BACM I and, in such
capacity, has shared power to vote and dispose of securities
held by BACM I and BACI Management, and may therefore be deemed
to have shared voting and dispositive power over the shares of
common stock that BACI may be deemed to beneficially own.
Mr. Hain disclaims such beneficial ownership. BA Equity
Investors, Inc., a subsidiary of Bank of America Corporation, is
the sole limited partner of BACI, but does not control the
voting or disposition of any securities directly or indirectly
owned by BACI. The address of each of the persons referred to in
this paragraph is 100 North Tryon Street, Floor 25, Bank of
America Corporate Center, Charlotte, NC 28255. |
|
(5) |
On February 14, 2006, FMR Corporation reported beneficial
ownership of 24,282,436 of the common shares of Celanese
Corporation as of December 31, 2005 and the sole power to
vote or to direct the vote of 620,225 shares. The address
of FMR Corporation is 82 Devonshire Street, Boston, MA 02109. |
|
(6) |
The address for each of Messrs. Weidman, Gallagher, Cole,
Pohlmann, Shaw, Ballbach, Barlett, Joyce, ONeill and
Sanders is c/o Celanese Corporation, 1601 W. LBJ
Freeway, Dallas, TX 75234-6034. |
|
(7) |
Mr. Chu is a Senior Managing Director, Mr. Quella is
Senior Managing Director and Senior Operating Partner and
Messrs. Jenkins and Mukherjee are Principals of The
Blackstone Group. Messrs. Chu, Quella, Jenkins and
Mukherjee disclaim beneficial ownership of the shares held by
affiliates of The Blackstone Group. The address for each of
Messrs. Chu, Quella, Jenkins and Mukherjee is c/o The
Blackstone Group, 345 Park Avenue, New York, NY 10154. |
S-21
DESCRIPTION OF INDEBTEDNESS
Amended and Restated Senior Credit Facilities
On January 26, 2005, BCP Crystal entered into amended and
restated senior credit facilities with a syndicate of banks and
other financial institutions led by Deutsche Bank AG, New York
Branch, as administrative agent, Deutsche Bank Securities Inc.
and Morgan Stanley Senior Funding, Inc., as joint lead
arrangers, Deutsche Bank Securities Inc., Morgan Stanley Senior
Funding, Inc. and Banc of America Securities LLC, as joint book
runners, Morgan Stanley Senior Funding, Inc., as syndication
agent, and Bank of America, N.A., as documentation agent.
The amended and restated senior credit facilities provide
financing of approximately $2.5 billion. The amended and
restated senior credit facilities consist of:
|
|
|
|
|
a term loan facility in the aggregate amount of approximately
$1.4 billion and
272 million with a maturity on April 6, 2011; |
|
|
|
an approximate $228 million credit-linked revolving
facility with a maturity on April 6, 2009; and |
|
|
|
a $600 million revolving credit facility with a maturity on
April 6, 2009. |
BCP Crystal is the borrower under the term loan facility, and
BCP Crystal and CAC are the initial borrowers under the
credit-linked revolving facility and the revolving credit
facility. Certain of BCP Crystals subsidiaries may be
designated as additional borrowers under the revolving credit
facility. A portion of the revolving credit facility may be made
available to BCP Crystals
non-U.S. subsidiary
borrowers in euros. The revolving credit facility includes
borrowing capacity available for letters of credit and for
borrowings on same-day notice, referred to as the swingline
loans.
The borrowings under the amended and restated senior credit
facilities bear interest at a rate equal to an applicable margin
plus, at BCP Crystals option, either (a) a base rate
determined by reference to the higher of (1) the prime rate
of Deutsche Bank AG, New York Branch and (2) the federal
funds rate plus 1/2 of 1% or (b) a LIBOR rate determined by
reference to the costs of funds for deposits in the currency of
such borrowing for the interest period relevant to such
borrowing adjusted for certain additional costs. The applicable
margin for borrowings under the credit-linked revolving facility
and the revolving credit facility is 1.50% with respect to base
rate borrowings and 2.50% with respect to LIBOR borrowings (in
each case subject to a step-down based on a performance test).
The applicable margin for borrowings under the euro denominated
portion of the term loan facility is 2.50% (subject to a
step-down based on a performance test).
In November 2005, BCP Crystal amended its amended and restated
senior credit facilities to lower the applicable margin for
borrowings under the U.S. dollar denominated portion of the
term loan facility from 2.25% to 2.00% (with respect to LIBOR
borrowings) and from 1.25% to 1.00% (with respect to base rate
borrowings). In addition, a further reduction of such applicable
margin to 1.75% (with respect to LIBOR borrowings) and 0.75%
(with respect to base rate borrowings) is allowed if certain
conditions are met.
In addition to paying interest on outstanding principal under
the amended and restated senior credit facilities, BCP Crystal
is required to pay a commitment fee to the lenders under the
revolving credit facility in respect of the unutilized
commitments thereunder at a rate equal to 0.75%. BCP Crystal is
also required to pay a facility fee to the lenders under the
credit-linked revolving facility in respect of the total
credit-linked deposits thereunder at a rate equal to 2.50%
(subject to a reduction based on a performance test) (plus an
amount equal to the administrative costs for investing the
credit-linked deposits). BCP Crystal also pays customary letter
of credit fees.
S-22
The amended and restated senior credit facilities require BCP
Crystal to prepay outstanding term loans, subject to certain
exceptions, with:
|
|
|
|
|
75% (which percentage will be reduced to 50% if BCP
Crystals leverage ratio is less than 3.00 to 1.00 for any
fiscal year ending on or after December 31, 2005) of its
excess cash flow; |
|
|
|
100% of the net cash proceeds of all non-ordinary course asset
sales and casualty and condemnation events, if BCP Crystal does
not reinvest or contract to reinvest those proceeds in assets to
be used in BCP Crystals business or to make certain other
permitted investments within 12 months, subject to certain
limitations; |
|
|
|
100% of the net cash proceeds of any incurrence of debt other
than debt permitted under the amended and restated senior credit
facilities, subject to certain exceptions; and |
|
|
|
50% of the net cash proceeds of issuances of equity of Celanese
Holdings LLC (Celanese Holdings), subject to certain
exceptions. |
BCP Crystal may voluntarily repay outstanding loans under the
amended and restated senior credit facilities at any time
without premium or penalty, other than customary
breakage costs with respect to LIBOR loans.
The term loan facility amortizes each year in an amount equal to
1% per annum in equal quarterly installments, with the
remaining amount payable on April 6, 2011.
Principal amounts outstanding under the credit-linked revolving
facility and the revolving credit facility are due and payable
in full on April 6, 2009.
All obligations under the amended and restated senior credit
facilities are unconditionally guaranteed by Celanese Holdings
and, subject to certain exceptions, each of BCP Crystals
existing and future domestic subsidiaries (other than BCP
Crystals receivables subsidiaries), referred to
collectively as the U.S. Guarantors. The portion of the
amended and restated senior credit facilities borrowed by CAC,
and any subsidiaries designated as additional borrowers under
the revolving credit facility, is guaranteed by BCP Crystal.
All obligations under the amended and restated senior credit
facilities, and the guarantees of those obligations (as well as
cash management obligations and any interest hedging or other
swap agreements), are secured by a first priority lien on
substantially all the assets of Celanese Holdings, BCP Crystal
and each U.S. Guarantor, including, but not limited to, the
following, and subject to certain exceptions:
|
|
|
|
|
a pledge of the capital stock of BCP Crystal, to the extent
owned by Celanese Holdings, 100% of the capital stock of all
U.S. Guarantors, and 65% of the capital stock of each of
BCP Crystals
non-U.S.
subsidiaries that is directly owned by BCP Crystal or one of the
U.S. Guarantors; and |
|
|
|
a security interest in substantially all other tangible and
intangible assets of Celanese Holdings, BCP Crystal and each
U.S. Guarantor (but excluding receivables sold to a
receivables subsidiary under a receivables facility). |
All obligations of each
non-U.S. subsidiary
designated as an additional borrower under the revolving credit
facility will be secured by a pledge of the capital stock of
such
non-U.S. subsidiary.
S-23
|
|
|
Certain Covenants and Events of Default |
The amended and restated senior credit facilities contain a
number of covenants that, among other things, restrict, subject
to certain exceptions, the ability of Celanese Holdings and its
subsidiaries, to:
|
|
|
|
|
sell assets; |
|
|
|
incur additional indebtedness or issue preferred stock; |
|
|
|
repay other indebtedness; |
|
|
|
pay dividends and distributions or repurchase their capital
stock; |
|
|
|
create liens on assets; |
|
|
|
make investments, loans, guarantees or advances; |
|
|
|
make certain acquisitions; |
|
|
|
engage in mergers or consolidations; |
|
|
|
enter into sale and leaseback transactions; |
|
|
|
engage in certain transactions with affiliates; |
|
|
|
amend certain material agreements governing BCP Crystals
indebtedness; |
|
|
|
change the business conducted by Celanese Holdings and its
subsidiaries (including BCP Crystal); |
|
|
|
enter into agreements that restrict dividends from
subsidiaries; and |
|
|
|
enter into hedging agreements. |
In addition, the amended and restated senior credit facilities
require BCP Crystal to maintain the following financial
covenants:
|
|
|
|
|
a maximum total leverage ratio; |
|
|
|
a minimum interest coverage ratio; and |
|
|
|
a maximum capital expenditures limitation. |
The amended and restated senior credit facilities also contain
certain customary affirmative covenants and events of default.
See Managements Discussion and Analysis of Financial
Condition and Results of OperationsLiquidity and Capital
ResourcesCash FlowsLiquidityCovenants in
our Annual Report on
Form 10-K for the
fiscal year ended December 31, 2005, which is incorporated
by reference herein, for a description of the ratios BCP Crystal
is required to maintain under the amended and restated senior
credit facilities.
Senior Subordinated Notes due 2014
In June and July 2004, Celanese Caylux (BCP Caylux)
issued $1,225 million aggregate principal amount of
95/8%
U.S. Dollar-denominated senior subordinated notes and
200 million
principal amount of
103/8
% Euro-denominated senior subordinated notes that mature
on June 15, 2014 in a private transaction not subject to
the registration requirements under the Securities Act. In
October 2004, BCP Crystal assumed all rights and obligations of
BCP Caylux under the senior subordinated notes. In February
2005, BCP Crystal redeemed approximately 35% of the aggregate
principal amount of the senior subordinated notes with a portion
of the net proceeds from the offering by Celanese Corporation of
its Series A common stock and preferred stock that was
contributed to BCP Crystal for such purpose.
S-24
The senior subordinated notes are BCP Crystals senior
subordinated unsecured obligations and rank junior in right of
payment to all of BCP Crystals existing and future senior
indebtedness; rank equally in right of payment with all of BCP
Crystals existing and future senior subordinated
indebtedness; are effectively subordinated in right of payment
to all of BCP Crystals existing and future secured
indebtedness (including obligations under the amended and
restated senior credit facilities), to the extent of the value
of the assets securing such indebtedness; are structurally
subordinated to all obligations of each of BCP Crystals
subsidiaries that are not guarantors; and rank senior in right
of payment to all of BCP Crystals future subordinated
indebtedness.
The dollar senior subordinated notes and the euro senior
subordinated notes may be redeemed, in each case, at BCP
Crystals option, in whole or in part, at any time prior to
June 15, 2009, at a redemption price equal to 100% of the
principal amount of the senior subordinated notes redeemed, plus
the greater of: (1) 1.0% of the then outstanding principal
amount of the senior subordinated notes; and (2) the excess
of (a) the present value at such redemption date of
(i) the redemption price of the senior subordinated notes
at June 15, 2009 (as set forth in the table below), plus
(ii) all required interest payments due on the senior
subordinated notes through June 15, 2009 (excluding accrued
but unpaid interest), computed using a discount rate equal to
the applicable treasury rate as of such redemption date plus
50 basis points; over (b) the then outstanding
principal amount of the senior subordinated notes, plus accrued
and unpaid interest and additional interest, if any, to the
redemption date.
The dollar senior subordinated notes and the euro senior
subordinated notes may be redeemed, in each case, at BCP
Crystals option, in whole or in part, at any time on or
after June 15, 2009, at the redemption prices (expressed as
percentages of principal amount) as set forth in the table
below, plus accrued and unpaid interest and additional interest,
if any, to the redemption date, if redeemed during the twelve
month period commencing on June 15 of the years set forth below:
|
|
|
Dollar Senior Subordinated Notes |
|
|
|
|
|
Period |
|
Redemption Price | |
|
|
| |
2009
|
|
|
104.813% |
|
2010
|
|
|
103.208% |
|
2011
|
|
|
101.604% |
|
2012 and thereafter
|
|
|
100.000% |
|
|
|
|
Euro Senior Subordinated Notes |
|
|
|
|
|
Period |
|
Redemption Price | |
|
|
| |
2009
|
|
|
105.188% |
|
2010
|
|
|
103.458% |
|
2011
|
|
|
101.729% |
|
2012 and thereafter
|
|
|
100.000% |
|
In addition, at any time on or prior to June 15, 2007,
(x) up to 35% of the aggregate principal amount of the
dollar senior subordinated notes originally issued and
(y) up to 35% of the aggregate principal amount of the euro
senior subordinated notes originally issued shall be redeemable,
in each case, in cash at BCP Crystals option at a
redemption price of 109.625% of the principal amount thereof in
the case of the dollar senior subordinated notes and 110.375% of
the principal amount thereof in the case of the euro senior
subordinated notes, plus, in each case, accrued and unpaid
interest and additional interest, if any, to the redemption
date, with the net cash proceeds of one or more equity
offerings; provided, however, at least 65% of the
original aggregate principal amount of dollar senior
subordinated notes in the case of each redemption of dollar
senior subordinated notes, and at least 65% of euro senior
subordinated notes in the case of each
S-25
redemption of euro senior subordinated notes, in each case
remains outstanding after each such redemption and provided,
further, that such redemption will occur within 90 days
after the date on which any such equity offering is consummated.
Upon the occurrence of a change of control, which is defined in
the indenture governing the senior subordinated notes, each
holder of the senior subordinated notes has the right to require
BCP Crystal to repurchase some or all of such holders
senior subordinated notes at a purchase price in cash equal to
101% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the repurchase date.
The indenture governing the senior subordinated notes contains
covenants limiting, among other things, BCP Crystals
ability and the ability of its restricted subsidiaries to:
|
|
|
|
|
incur additional indebtedness; |
|
|
|
pay dividends on or make other distributions or repurchase
capital stock of BCP Crystal or its parent entities; |
|
|
|
make certain investments; |
|
|
|
enter into certain types of transactions with affiliates; |
|
|
|
limit dividends or other payments by its restricted subsidiaries
to BCP Crystal; |
|
|
|
use assets as security in other transactions; and |
|
|
|
sell certain assets or merge with or into other companies. |
The indenture governing the senior subordinated notes also
provides for events of default which, if any of them occurs,
would permit or require the principal of and accrued interest on
such senior subordinated notes to become or to be declared due
and payable.
As of March 31, 2006, BCP Crystal was in compliance in all
material respects with all covenants and provisions contained
under the indenture governing these notes.
Senior Discount Notes due 2014
In September 2004, our subsidiaries Crystal US 3
Holdings L.L.C. and Crystal US Sub 3 Corp. (collectively,
Crystal 3), issued $853 million aggregate
principal amount at maturity ($513 million in gross
proceeds) of their Senior Discount Notes due 2014 (the
senior discount notes) consisting of
$163 million aggregate principal amount at maturity of its
10% Series A Senior Discount Notes (the series A
notes) and $690 million aggregate principal amount at
maturity of their
101/2
% Series B Senior Discount Notes (the
series B notes). Prior to October 1, 2009,
interest will accrue on the senior discount notes in the form of
an increase in their accreted value. Cash interest payments will
be due and payable beginning on April 1, 2010. In February
2005, Crystal 3 redeemed approximately 35% of the aggregate
principal amount at maturity of the senior discount notes with a
portion of the net proceeds from the offering by Celanese
Corporation of its Series A common stock and preferred
stock that was contributed to Crystal 3 for that purpose.
The senior discount notes are Crystal 3s unsecured
obligations and rank equally with all of Crystal 3s
future senior obligations and senior to Crystal 3s
future subordinated indebtedness. The senior discount notes are
effectively subordinated to Crystal 3s future secured
indebtedness to the extent of the assets securing that
S-26
indebtedness and are structurally subordinated to all
indebtedness and other obligations of Crystal 3s
subsidiaries, including Celanese Holdings and BCP Crystal.
The senior discount notes may be redeemed at
Crystal 3s option, in whole or in part, at any time
prior to October 1, 2009, at a redemption price equal to
100% of the accreted value of the senior discount notes
redeemed, plus the greater of: (1) 1.0% of the then
outstanding accreted value of the senior discount notes; and
(2) the excess of (a) the present value at such
redemption date of the redemption price of the senior discount
notes at October 1, 2009 (as set forth in the table below),
computed using a discount rate equal to the applicable treasury
rate as of such redemption date plus 50 basis points; over
(b) the then outstanding accreted value of the senior
discount notes.
The senior discount notes may be redeemed, in each case, at
Crystal 3s option, in whole or in part, at any time
on or after October 1, 2009, at the redemption prices
(expressed as percentages of principal amount) as set forth in
the table below, plus accrued and unpaid interest and additional
interest, if any, to the redemption date, if redeemed during the
twelve month period commencing on October 1 of the years
set forth below:
|
|
|
|
|
Period |
|
Redemption Price | |
|
|
| |
2009
|
|
|
105.000% |
|
2010
|
|
|
103.333% |
|
2011
|
|
|
101.667% |
|
2012 and thereafter
|
|
|
100.000% |
|
|
|
|
|
|
Period |
|
Redemption Price | |
|
|
| |
2009
|
|
|
105.250% |
|
2010
|
|
|
103.500% |
|
2011
|
|
|
101.750% |
|
2012 and thereafter
|
|
|
100.000% |
|
In addition, at any time on or prior to October 1, 2007,
(i) up to 35% of the aggregate principal amount at maturity
of the series A notes may be redeemed at
Crystal 3s option at a redemption price of 110% of
the accreted value thereof, plus additional interest, if any, to
the redemption date, with the proceeds of certain equity
offerings; provided, however, at least 65% of the original
aggregate principal amount at maturity of series A notes
remains outstanding after each such redemption, and
(ii) (x) up to 35% of the aggregate principal amount
at maturity of the series B notes may be redeemed at
Crystal 3s option at a redemption price of 110.500% of the
accreted value thereof, plus additional interest, if any, to the
redemption date, with proceeds of certain equity offerings;
provided, however, at least 65% of the original aggregate
principal amount at maturity of the series B notes remains
outstanding after each such redemption, or (y) all, but not
less than all, of the series B notes shall be redeemed at
Crystal 3s option at a redemption price of 110.500%
of the accreted value thereof, plus additional interest, if any,
to the redemption date, with the proceeds of certain equity
offerings; in each case provided, that such redemption will
occur within 90 days after the date on which such equity
offering is consummated.
Upon the occurrence of a change of control, which is defined in
the indenture governing the senior discount notes, each holder
of the senior discount notes has the right to require
Crystal 3 to repurchase some or all of such holders
senior discount notes at a purchase price in cash equal to 101%
of the accreted value thereof, plus accrued and unpaid interest
and liquidated damages, if any, to the repurchase date.
S-27
The indenture governing the senior discount notes contains
covenants limiting, among other things, Crystal 3s
ability and the ability of its restricted subsidiaries to:
|
|
|
|
|
incur additional indebtedness or issue preferred stock; |
|
|
|
pay dividends on or make other distributions or repurchase
capital stock of Crystal 3 or make other restricted
payments; |
|
|
|
make certain investments; |
|
|
|
enter into certain types of transactions with affiliates; |
|
|
|
limit dividends or other payments by its restricted subsidiaries
to Crystal 3 or other restricted subsidiaries; |
|
|
|
sell certain assets or merge with or into other companies. |
The indenture governing the senior discount notes also provides
for events of default which, if any of them occurs, would permit
or require the accreted value of and accrued interest on such
senior discount notes to become or to be declared due and
payable.
As of March 31, 2006, Crystal 3 was in compliance in
all material respects with all covenants and provisions
contained under the indenture governing the senior discount
notes.
S-28
SHARES ELIGIBLE FOR FUTURE SALE
We cannot predict what effect, if any, market sales of shares of
common stock or the availability of shares of Series A
common stock for sale will have on the market price of our
Series A common stock. Nevertheless, sales of substantial
amounts of Series A common stock in the public market, or
the perception that such sales could occur, could materially and
adversely affect the market price of our common stock and could
impair our future ability to raise capital through the sale of
our equity or equity-related securities at a time and price that
we deem appropriate.
As of May 8, 2006, we had a total of
158,562,161 shares of Series A common stock
outstanding. Of the outstanding shares, the shares sold in our
January 2005 initial public offering and in our November 2005
and December 2005 offering by the selling stockholders are, and
the shares sold in this offering will be, freely tradable
without restriction or further registration under the Securities
Act, except that any shares held by our affiliates,
as that term is defined under Rule 144 of the Securities
Act, may be sold only in compliance with the limitations
described below. The remaining outstanding shares of
Series A common stock will be deemed restricted
securities as that term is defined under Rule 144.
Restricted securities may be sold in the public market only if
registered or if they qualify for an exemption from registration
under Rule 144 or 144(k) under the Securities Act, which
are summarized below.
Subject to the lock-up
agreements described below and the provisions of Rule 144,
approximately 40,367,139 million additional shares of our
common stock will be available for sale in the public market
after the expiration of any such
lock-up period (subject
to volume limitations and other conditions under Rule 144).
In general, under Rule 144 as currently in effect, a person
(or persons whose shares are required to be aggregated),
including an affiliate, who has beneficially owned shares of our
common stock for at least one year is entitled to sell in any
three month period a number of shares that does not exceed the
greater of:
|
|
|
|
|
1% of the then-outstanding shares of common stock or
approximately 1.6 million shares; and |
|
|
|
the average weekly reported volume of trading in the common
stock on the New York Stock Exchange during the four calendar
weeks preceding the date on which notice of sale is filed,
subject to restrictions. |
Sales under Rule 144 are also subject to manner of sale
provisions and notice requirements and to the availability of
current public information about us.
Lock-Up Agreements
We and the selling stockholders have agreed that, without the
prior written consent of the underwriter, we and they will not,
during the period ending 60 days after the date of this
prospectus supplement:
|
|
|
|
|
offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, lend or
otherwise transfer or dispose of, directly or indirectly, any of
our shares of Series A common stock or any securities
convertible into or exercisable or exchangeable for our
Series A common stock; |
|
|
|
file or cause to be filed any registration statement with the
SEC relating to the offering of any shares of Series A
common stock or any securities convertible or exercisable or
exchangeable for our Series A common stock; or |
|
|
|
enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences
of ownership of our Series A common stock; |
whether any such transaction described above is to be settled by
delivery of our Series A common stock or other securities,
in cash or otherwise. The restrictions described in this
paragraph do not apply to:
|
|
|
|
|
the sale of shares of our Series A common stock to the
underwriter in this offering; |
|
|
|
the issuance by us of shares of Series A common stock upon
conversion, redemption, exchange or otherwise pursuant to the
terms of our convertible perpetual preferred stock, or upon the
exercise of |
S-29
|
|
|
|
|
an option, or a warrant or a similar security or the conversion
of a security outstanding on the date hereof and reflected in
this prospectus supplement and the accompanying prospectus; |
|
|
|
the grants by us of options or stock, or the issuance by us of
stock, under our benefit plans (or the filing of one or more
registration statements covering such issuances or grants)
described in this prospectus supplement and the accompanying
prospectus; |
|
|
|
permitted sales and transfers by us of Series A common
stock under the Celanese Americas Retirement Savings Plan; |
|
|
|
distributions of shares of Series A common stock or any
security convertible into Series A common stock to limited
partners or stockholders of the selling stockholders, provided
that the recipients of such Series A common stock agree to
be bound by the restrictions described in this paragraph for the
remainder of such
60-day period; |
|
|
|
the issuance of Series A common stock in connection with
the acquisition of, a joint venture with or a merger with,
another company, and the filing of a registration statement with
respect thereto, provided that, subject to certain exceptions,
the recipients of such Series A common stock agree to be
bound by the restrictions described in this paragraph for the
remainder of such
60-day period; |
|
|
|
transactions by any person other than us relating to shares of
Series A common stock acquired in open market transactions
after the completion of this offering; and |
|
|
|
the filing of a registration statement pursuant to the
registration rights of any of the selling stockholders. |
S-30
CERTAIN UNITED STATES FEDERAL INCOME AND ESTATE TAX
CONSEQUENCES TO
NON-U.S. HOLDERS
The following is a summary of certain United States federal
income and estate tax consequences of the purchase, ownership
and disposition of our Series A common stock as of the date
hereof. Except where noted, this summary deals only with
Series A common stock that is held as a capital asset by a
non-U.S. holder.
A
non-U.S. holder
means a person (other than a partnership) that is not for United
States federal income tax purposes any of the following:
|
|
|
|
|
an individual citizen or resident of the United States; |
|
|
|
a corporation (or any other entity treated as a corporation for
United States federal income tax purposes) created or organized
in or under the laws of the United States, any state thereof or
the District of Columbia; |
|
|
|
an estate the income of which is subject to United States
federal income taxation regardless of its source; or |
|
|
|
a trust if it (1) is subject to the primary supervision of
a court within the United States and one or more United States
persons have the authority to control all substantial decisions
of the trust or (2) has a valid election in effect under
applicable United States Treasury regulations to be treated as a
United States person. |
This summary is based upon provisions of the Internal Revenue
Code of 1986, as amended (the Code), and
regulations, rulings and judicial decisions as of the date
hereof. Those authorities may be changed, perhaps retroactively,
so as to result in United States federal income and estate tax
consequences different from those summarized below. This summary
does not address all aspects of United States federal income and
estate taxes and does not deal with foreign, state, local or
other tax considerations that may be relevant to
non-U.S. holders
in light of their personal circumstances. In addition, it does
not represent a detailed description of the United States
federal income and estate tax consequences applicable to you if
you are subject to special treatment under the United States
federal income tax laws (including if you are a United States
expatriate, controlled foreign corporation,
passive foreign investment company, or an investor
in a pass-through entity). We cannot assure you that a change in
law will not alter significantly the tax considerations that we
describe in this summary.
If a partnership holds our Series A common stock, the tax
treatment of a partner will generally depend upon the status of
the partner and the activities of the partnership. If you are a
partner of a partnership holding our Series A common stock,
you should consult your tax advisors.
If you are considering the purchase of our Series A common
stock, you should consult your own tax advisors concerning the
particular United States federal income and estate tax
consequences to you of the ownership of the Series A common
stock, as well as the consequences to you arising under the laws
of any other taxing jurisdiction.
Dividends
Distributions paid to a
non-U.S. holder of
our Series A common stock that qualify as dividends
generally will be subject to withholding of United States
federal income tax at a 30% rate or such lower rate as may be
specified by an applicable income tax treaty. However, dividends
that are effectively connected with the conduct of a trade or
business by the
non-U.S. holder
within the United States (and, where a tax treaty applies, are
attributable to a United States permanent establishment of the
non-U.S. holder)
are not subject to the withholding tax, provided certain
certification and disclosure requirements are satisfied.
Instead, such dividends are subject to United States federal
income tax on a net income basis in the same manner as if the
non-U.S. holder
were a United States person as defined under the Code. Any such
effectively connected dividends received by a foreign
corporation may be subject to an additional branch profits
tax at a 30% rate or such lower rate as may be specified
by an applicable income tax treaty.
S-31
A non-U.S. holder
of our Series A common stock who wishes to claim the
benefit of an applicable treaty and avoid backup withholding, as
discussed below, on dividends will be required to
(a) complete Internal Revenue Service
Form W-8BEN (or
other applicable form) and certify under penalty of perjury that
such holder is not a United States person as defined under the
Code or (b) if our Series A common stock is held
through certain foreign intermediaries, satisfy the relevant
certification requirements of applicable United States Treasury
regulations. Special certification and other requirements apply
to certain
non-U.S. holders
that are entities rather than individuals.
A non-U.S. holder
of our Series A common stock eligible for a reduced rate of
United States withholding tax pursuant to an income tax treaty
may obtain a refund of any excess amounts withheld by filing an
appropriate claim for refund with the Internal Revenue Service.
If we determine, at a time reasonably close to the date of
payment of a distribution on our Series A common stock,
that the distribution will not qualify as a dividend because we
will have insufficient current and accumulated earnings and
profits, we may elect not to withhold any United States federal
income tax on the distribution as permitted by Treasury
regulations. If we or another withholding agent withholds tax on
any such distribution that is made during a taxable year for
which we have insufficient current and accumulated earnings and
profits, you may be entitled to a refund of the tax withheld,
which you may claim by filing a United States tax return. Though
no assurance can be given, we believe that we will have current
earnings and profits as determined for United States federal
income tax purposes for the current year, although we do not
presently believe we will have any accumulated earnings and
profits. Because our earnings and profits in future years will
depend in significant part on our future profits or losses,
which we cannot accurately predict, we do not know whether we
will have current earnings and profits in the future.
Gain on Disposition of Series A Common Stock
Any gain realized on the disposition of our Series A common
stock generally will not be subject to United States federal
income tax unless:
|
|
|
|
|
the gain is effectively connected with a trade or business of
the non-U.S.
holder in the United States, and, if required by an applicable
income tax treaty, is attributable to a United States permanent
establishment of the
non-U.S. holder; |
|
|
|
the
non-U.S. holder is
an individual who is present in the United States for
183 days or more in the taxable year of that disposition,
and certain other conditions are met; or |
|
|
|
we are or have been a United States real property holding
corporation for United States federal income tax purposes. |
An individual
non-U.S. holder
described in the first bullet point immediately above will be
subject to tax on the net gain derived from the sale under
regular graduated United States federal income tax rates. An
individual
non-U.S. holder
described in the second bullet point immediately above will be
subject to a flat 30% tax on the gain derived from the sale,
which may be offset by United States source capital losses, even
though the individual is not considered a resident of the United
States. If a
non-U.S. holder
that is a foreign corporation falls under the first bullet point
immediately above, it will be subject to tax on its net gain in
the same manner as if it were a United States person as defined
under the Code and, in addition, may be subject to the branch
profits tax equal to 30% of its effectively connected earnings
and profits or at such lower rate as may be specified by an
applicable income tax treaty.
We believe we are not and do not anticipate becoming a
United States real property holding corporation for
United States federal income tax purposes.
Federal Estate Tax
Series A common stock held by an individual
non-U.S. holder at
the time of death will be included in such holders gross
estate for United States federal estate tax purposes, unless an
applicable estate tax treaty provides otherwise.
S-32
Information Reporting and Backup Withholding
We must report annually to the Internal Revenue Service and to
each
non-U.S. holder
the amount of distributions qualifying as dividends paid to such
holder and the tax withheld with respect to such dividends,
regardless of whether withholding was required. Copies of the
information returns reporting such dividends and withholding may
also be made available to the tax authorities in the country in
which the
non-U.S. holder
resides under the provisions of an applicable income tax treaty.
A non-U.S. holder
will be subject to backup withholding on dividends paid to such
holder unless such holder certifies under penalty of perjury
that it is a
non-U.S. holder,
and the payor does not have actual knowledge or reason to know
that such holder is a United States person as defined under the
Code, or such holder otherwise establishes an exemption.
Information reporting and, depending on the circumstances,
backup withholding will apply to the proceeds of a sale of our
Series A common stock within the United States or conducted
through certain United States-related financial intermediaries,
unless the beneficial owner certifies under penalty of perjury
that it is a
non-U.S. holder
(and the payor does not have actual knowledge or reason to know
that the beneficial owner is a United States person as defined
under the Code) or such owner otherwise establishes an exemption.
Any amounts withheld under the backup withholding rules may be
allowed as a refund or a credit against a
non-U.S. holders
United States federal income tax liability provided the required
information is furnished to the Internal Revenue Service.
S-33
UNDERWRITER
Under the terms and subject to the conditions contained in the
underwriting agreement dated the date of this prospectus
supplement, among Celanese Corporation, the selling stockholders
and Goldman, Sachs & Co., which we refer to as the
underwriter, the underwriter has agreed to purchase, and the
selling stockholders have agreed to sell to the underwriter,
severally, 35,000,000 shares of Series A common stock.
The underwriter is offering the shares of Series A common
stock subject to its acceptance of the shares from us and
subject to prior sale. The underwriting agreement provides that
the obligations of the underwriter to pay for and accept
delivery of the Series A common stock offered by this
prospectus supplement are subject to the approval of certain
legal matters by its counsel and to certain other conditions.
The underwriter is obligated to take and pay for all of the
shares of Series A common stock offered by this prospectus
supplement and the accompanying prospectus if any such shares
are taken. However, the underwriter is not required to take or
pay for the shares covered by the underwriters
over-allotment option described below.
The underwriter proposes to offer the shares of Series A
common stock from time to time for sale in one or more
transactions in the
over-the-counter
market, through negotiated transactions or otherwise at market
prices prevailing at the time of the sale, at prices related to
prevailing market prices or at negotiated prices, subject to
receipt and acceptance by it and subject to its right to reject
any order in whole or in part. In connection with the sale of
the shares of Series A common stock offered hereby, the
underwriter may be deemed to have received compensation in the
form of underwriting discounts. The underwriter may effect such
transactions by selling shares of the Series A common stock
offered hereby to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions or
commissions from the underwriter and/or purchasers of shares of
Series A common stock for whom they may act as agents or to
whom they may sell as principal.
The selling stockholders have granted to the underwriter an
option, exercisable for 30 days from the date of this
prospectus supplement, to purchase up to an aggregate of
5,250,000 additional shares of Series A common stock at the
same price per share to be paid by the underwriter for the other
shares offered hereby. The underwriter may exercise this option
solely for the purpose of covering over-allotments, if any, made
in connection with the offering of the shares of Series A
common stock offered by this prospectus supplement. If the
underwriters over-allotment option is exercised in full,
the total proceeds to the selling stockholders would be
$847,262,500.
We and the selling stockholders have agreed that, without the
prior written consent of the underwriter, we and they will not,
during the period ending 60 days after the date of this
prospectus supplement:
|
|
|
|
|
offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase, lend or
otherwise transfer or dispose of, directly or indirectly, any of
our shares of Series A common stock or any securities
convertible into or exercisable or exchangeable for our
Series A common stock; |
|
|
|
file or cause to be filed any registration statement with the
SEC relating to the offering of any shares of Series A
common stock or any securities convertible or exercisable or
exchangeable for our Series A common stock; or |
|
|
|
enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences
of ownership of our Series A common stock; |
whether any such transaction described above is to be settled by
delivery of our Series A common stock or other securities,
in cash or otherwise. The restrictions described in this
paragraph do not apply to:
|
|
|
|
|
the sale of shares of our Series A common stock to the
underwriter in this offering; |
|
|
|
the issuance by us of shares of Series A common stock upon
conversion, redemption, exchange or otherwise pursuant to the
terms of our convertible perpetual preferred stock or upon the
exercise of an option, or a warrant or a similar security or the
conversion of a security outstanding on the date hereof and
reflected in this prospectus supplement and the accompanying
prospectus; |
S-34
|
|
|
|
|
the grants by us of options or stock, or the issuance by us of
stock, under our benefit plans (or the filing of one or more
registration statements covering such issuances or grants)
described in this prospectus supplement and the accompanying
prospectus; |
|
|
|
permitted sales and transfers by us of Series A common
stock under the Celanese Americas Retirement Savings Plan; |
|
|
|
distributions of shares of Series A common stock or any
security convertible into Series A common stock to limited
partners or stockholders of the selling stockholders, provided
that the recipients of such Series A common stock agree to
be bound by the restrictions described in this paragraph for the
remainder of such
60-day period; |
|
|
|
the issuance of Series A common stock in connection with
the acquisition of, a joint venture with or a merger with,
another company, and the filing of a registration statement with
respect thereto, provided that, subject to certain exceptions,
the recipients of such Series A common stock agree to be
bound by the restrictions described in this paragraph for the
remainder of such
60-day period; |
|
|
|
transactions by any person other than us relating to shares of
Series A common stock acquired in open market transactions
after the completion of this offering; and |
|
|
|
the filing of a registration statement pursuant to the
registration rights of any of the selling stockholders. |
The estimated offering expenses payable by us are approximately
$750,000, which includes legal, accounting and printing costs
and various other fees associated with registering the
Series A common stock.
In order to facilitate the offering of the Series A common
stock, the underwriter may engage in transactions that
stabilize, maintain or otherwise affect the price of the
Series A common stock. Specifically, the underwriter may
sell more stock than it is obligated to purchase under the
underwriting agreement, creating a short position. A short sale
is covered if the short position is no greater than the number
of shares of stock available for purchase by the underwriter
under the over-allotment option. The underwriter can close out a
covered short sale by exercising the over-allotment option or
purchasing stock in the open market. In determining the source
of stock to close out a covered short sale, the underwriter will
consider, among other things, the open market price of stock
compared to the price available under the over-allotment option.
The underwriter may also sell stock in excess of the
over-allotment option, creating a naked short position. The
underwriter must close out any naked short position by
purchasing stock in the open market. A naked short position is
more likely to be created if the underwriter is concerned that
there may be downward pressure on the price of the Series A
common stock in the open market after pricing that could
adversely affect investors who purchase in this offering. In
addition, to stabilize the price of the Series A common
stock, the underwriter may bid for, and purchase, Series A
common stock in the open market. Any of these activities may
stabilize or maintain the market price of the Series A
common stock above independent market levels. The underwriter is
not required to engage in these activities, and may end any of
these activities at any time.
From time to time, the underwriter and its affiliates have
provided, and continue to provide, investment banking and other
services to us for which they receive customary fees and
commissions.
The Series A common stock is listed on the New York Stock
Exchange under the symbol CE.
We, the selling stockholders and the underwriter have agreed to
indemnify each other against certain liabilities, including
liabilities under the Securities Act.
In relation to each Member State of the European Economic Area
which has implemented the Prospectus Directive, the underwriter
has represented and agreed that with effect from and including
the date on which the Prospectus Directive is implemented in
that Member State it has not made and will not make an offer of
shares to the public in that Member State, except that it may,
with effect from and including such date, make an offer of
shares to the public in that Member State:
|
|
|
(a) at any time to legal entities which are authorised or
regulated to operate in the financial markets or, if not so
authorised or regulated, whose corporate purpose is solely to
invest in securities; |
S-35
|
|
|
(b) at any time to any legal entity which has two or more
of (1) an average of at least 250 employees during the last
financial year; (2) a total balance sheet of more than
43,000,000 and
(3) an annual net turnover of more than
50,000,000, as shown in its last annual or consolidated
accounts; or |
|
|
(c) at any time in any other circumstances which do not
require the publication by us of a prospectus pursuant to
Article 3 of the Prospectus Directive. |
For the purposes of the above, the expression an offer of
shares to the public in relation to any shares in any
Member State means the communication in any form and by any
means of sufficient information on the terms of the offer and
the shares to be offered so as to enable an investor to decide
to purchase or subscribe the shares, as the same may be varied
in that Member State by any measure implementing the Prospectus
Directive in that Member State and the expression Prospectus
Directive means Directive 2003/71/ EC and includes any relevant
implementing measure in that Member State.
The underwriter has represented and agreed that it has only
communicated or caused to be communicated and will only
communicate or cause to be communicated an invitation or
inducement to engage in investment activity (within the meaning
of Section 21 of the Financial Services and Markets Act
2000) in connection with the issue or sale of the shares in
circumstances in which Section 21(1) of such Act does not
apply to us and it has complied and will comply with all
applicable provisions of such Act with respect to anything done
by it in relation to any shares in, from or otherwise involving
the United Kingdom.
The shares have not been and will not be registered under the
Securities and Exchange Law of Japan and may not be offered or
sold directly or indirectly in Japan except under circumstances
which result in compliance with all applicable laws, regulations
and guidelines promulgated by the relevant Japanese governmental
and regulatory authorities.
The shares may not be offered or sold by means of any document
other than to persons whose ordinary business is to buy or sell
shares or debentures, whether as principal or agent, or in
circumstances which do not constitute an offer to the public
within the meaning of the Companies Ordinance (Cap. 32) of
Hong Kong, and no advertisement, invitation or document relating
to the shares may be issued, whether in Hong Kong or elsewhere,
which is directed at, or the contents of which are likely to be
accessed or read by, the public in Hong Kong (except if
permitted to do so under the securities laws of Hong Kong) other
than with respect to shares which are or are intended to be
disposed of only to persons outside Hong Kong or only to
professional investors within the meaning of the
Securities and Futures Ordinance (Cap. 571) of Hong Kong and any
rules made thereunder.
This prospectus supplement and the accompanying prospectus have
not been registered as a prospectus with the Monetary Authority
of Singapore. Accordingly, this prospectus supplement and the
accompanying prospectus and any other document or material in
connection with the offer or sale, or invitation or subscription
or purchase, of the securities may not be circulated or
distributed, nor may the securities be offered or sold, or be
made the subject of an invitation for subscription or purchase,
whether directly or indirectly, to persons in Singapore other
than under circumstances in which such offer, sale or invitation
does not constitute an offer or sale, or invitation for
subscription or purchase, of the securities to the public in
Singapore.
If you purchase shares of Series A common stock offered in
this prospectus supplement, you may be required to pay stamp
taxes and other charges under the laws and practices of the
country of purchase, in addition to the offering price listed on
the cover page of this prospectus supplement.
NOTICE TO CANADIAN RESIDENTS
Resale Restrictions
The distribution of the shares of Series A common stock in
Canada is being made only on a private placement basis exempt
from the requirement that we and the selling stockholders
prepare and file a prospectus with the securities regulatory
authorities in each province where trades of Series A
common stock are made. Any resale of the Series A common
stock in Canada must be made under applicable securities laws
S-36
which will vary depending on the relevant jurisdiction, and
which may require resales to be made under available statutory
exemptions or under a discretionary exemption granted by the
applicable Canadian securities regulatory authority. Purchasers
are advised to seek legal advice prior to any resale of the
Series A common stock.
Representations of Purchasers
By purchasing shares of Series A common stock in Canada and
accepting a purchase confirmation a purchaser is representing to
us, the selling stockholders and the dealer from whom the
purchase confirmation is received that:
|
|
|
|
|
the purchaser is entitled under applicable provincial securities
laws to purchase the Series A common stock without the
benefit of a prospectus qualified under those securities laws, |
|
|
|
where required by law, that the purchaser is purchasing as
principal and not as agent, |
|
|
|
the purchaser has reviewed the text above under Resale
Restrictions, and |
|
|
|
the purchaser acknowledges and consents to the provision of
specified information concerning its purchase of the
Series A common stock to the regulatory authority that by
law is entitled to collect the information. |
Further details concerning the legal authority for this
information is available on request.
Rights of Action Ontario Purchasers Only
Under Ontario securities legislation, certain purchasers who
purchase a security offered by this prospectus supplement and
the accompanying prospectus during the period of distribution
will have a statutory right of action for damages, or while
still the owner of the Series A common stock, for
rescission against us and the selling stockholders in the event
that this prospectus supplement or the accompanying prospectus
contains a misrepresentation without regard to whether the
purchaser relied on the misrepresentation. The right of action
for damages is exercisable not later than the earlier of
180 days from the date the purchaser first had knowledge of
the facts giving rise to the cause of action and three years
from the date on which payment is made for the Series A
common stock. The right of action for rescission is exercisable
not later than 180 days from the date on which payment is
made for the Series A common stock. If a purchaser elects
to exercise the right of action for rescission, the purchaser
will have no right of action for damages against us or the
selling stockholders. In no case will the amount recoverable in
any action exceed the price at which the Series A common
stock were offered to the purchaser and if the purchaser is
shown to have purchased the securities with knowledge of the
misrepresentation, we and the selling stockholders will have no
liability. In the case of an action for damages, we and the
selling stockholders will not be liable for all or any portion
of the damages that are proven to not represent the depreciation
in value of the Series A common stock as a result of the
misrepresentation relied upon. These rights are in addition to,
and without derogation from, any other rights or remedies
available at law to an Ontario purchaser. The foregoing is a
summary of the rights available to an Ontario purchaser. Ontario
purchasers should refer to the complete text of the relevant
statutory provisions.
Enforcement of Legal Rights
All of our directors and officers as well as the experts named
herein and the selling stockholders may be located outside of
Canada and, as a result, it may not be possible for Canadian
purchasers to effect service of process within Canada upon us or
those persons. All or a substantial portion of our assets and
the assets of those persons may be located outside of Canada
and, as a result, it may not be possible to satisfy a judgment
against us or those persons in Canada or to enforce a judgment
obtained in Canadian courts against us or those persons outside
of Canada.
S-37
Taxation and Eligibility for Investment
Canadian purchasers of Series A common stock should consult
their own legal and tax advisors with respect to the tax
consequences of an investment in the Series A common stock
in their particular circumstances and about the eligibility of
the Series A common stock for investment by the purchaser
under relevant Canadian legislation.
VALIDITY OF THE SHARES
The validity of the shares of common stock to be sold hereunder
will be passed upon for us by Simpson Thacher &
Bartlett LLP, New York, New York, and for the underwriter by
Davis Polk & Wardwell, New York, New York. A private
investment fund comprised of selected partners of Simpson
Thacher & Bartlett LLP, members of their families,
related parties and others owns an interest representing less
than 1% of the capital commitments of funds affiliated with our
largest shareholder, The Blackstone Group.
S-38
PROSPECTUS
CELANESE CORPORATION
SERIES A COMMON STOCK
PREFERRED STOCK
DEPOSITARY SHARES
We may offer and sell shares of our Series A common stock,
preferred stock or depositary shares from time to time in
amounts, at prices and on terms that will be determined at the
time of any such offering. In addition, certain selling
stockholders may offer and sell shares of our Series A
common stock, from time to time in amounts, at prices and on
terms that will be determined at the time of any such offering.
Each time any securities are offered pursuant to this
prospectus, we will provide a prospectus supplement and attach
it to this prospectus. The prospectus supplement will contain
more specific information about the offering, including the
names of any selling stockholders, if applicable. The prospectus
supplement may also add, update or change information contained
in this prospectus. This prospectus may not be used to offer or
sell securities without a prospectus supplement describing the
method and terms of the offering.
You should carefully read this prospectus and any accompanying
prospectus supplement, together with the documents we
incorporate by reference, before you invest in our securities.
Our Series A common stock is listed on the New York Stock
Exchange under the symbol CE.
Investing in our securities involves risks. You should
consider the risk factors described in any accompanying
prospectus supplement and in the documents we incorporate by
reference.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the accuracy or adequacy of this
prospectus. Any representation to the contrary is a criminal
offense.
May 9, 2006
TABLE OF CONTENTS
|
|
|
|
|
|
|
Page | |
|
|
| |
|
|
|
i |
|
|
|
|
1 |
|
|
|
|
1 |
|
|
|
|
2 |
|
|
|
|
3 |
|
|
|
|
4 |
|
|
|
|
6 |
|
|
|
|
6 |
|
|
|
|
7 |
|
|
|
|
12 |
|
|
|
|
15 |
|
|
|
|
16 |
|
|
|
|
17 |
|
|
|
|
17 |
|
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on
Form S-3 that we
filed with the Securities and Exchange Commission using a
shelf registration process. Under this shelf
registration process, we and/or certain selling stockholders, if
applicable, may, from time to time, offer and/or sell securities
in one or more offerings or resales. Each time securities are
offered, we will provide a prospectus supplement and attach it
to this prospectus. The prospectus supplement will contain more
specific information about the offering, including the names of
any selling stockholders, if applicable. The prospectus
supplement may also add, update or change information contained
in this prospectus. Any statement that we make in this
prospectus will be modified or superseded by any inconsistent
statement made by us in a prospectus supplement. You should read
both this prospectus and any accompanying prospectus supplement
together with the additional information described under the
heading Incorporation of Certain Documents by
Reference.
You should rely only on the information contained in this
prospectus. Neither we nor any of our subsidiaries has
authorized anyone to provide you with information different from
that contained in this prospectus. The prospectus may be used
only for the purposes for which it has been published and no
person has been authorized to give any information not contained
in this prospectus. If you receive any other information, you
should not rely on it. We are not making an offer of these
securities in any state where the offer is not permitted.
You should not assume that the information in this
prospectus, any accompanying prospectus supplement or any
documents we incorporate by reference is accurate as of any date
other than the date on the front of these documents. Our
business, financial condition, results of operations and
prospectus may have changed since that date.
AVAILABLE INFORMATION
We are required to file annual, quarterly and current reports,
proxy statements and other information with the Securities and
Exchange Commission (the SEC). You may read and copy
any documents filed by us at the SECs public reference
room at 100 F Street, N.E., Washington, D.C. 20549. Please
call the SEC at
1-800-SEC-0330 for
further information on the public reference room. Our filings
with the SEC are also available to the public through the
SECs Internet site at http://www.sec.gov and through the
New York Stock Exchange, 20 Broad Street, New York, New
York 10005, on which our common stock is listed.
We have filed with the SEC a registration statement on
Form S-3 related
to the securities covered by this prospectus. This prospectus is
a part of the registration statement and does not contain all
the information in the registration statement. Whenever a
reference is made in this prospectus to a contract or other
document of the company, the reference is only a summary and you
should refer to the exhibits that are a part of the registration
statement for a copy of the contract or other document. You may
review a copy of the registration statement at the SECs
public reference room in Washington, D.C., as well as
through the SECs Internet site.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference the
information contained in documents that we file with them, which
means that we can disclose important information to you by
referring you to those documents. The information incorporated
by reference is considered to be part of this prospectus and
supersedes information incorporated by reference that we filed
with the SEC prior to the date of this prospectus. Information
that we file in the future with the SEC automatically will
update and supersede, as appropriate, the information contained
in this prospectus and in the documents previously filed with
the SEC and incorporated by reference into this prospectus. We
incorporate by reference the documents listed below and any
future filings we will make with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended, on or after the date of this
prospectus so long as the registration statement of which this
prospectus is a part remains effective:
|
|
|
|
|
our Annual Report on
Form 10-K for the
fiscal year ended December 31, 2005, filed on
March 31, 2006; |
|
|
|
our Quarterly Report on
Form 10-Q for the
quarterly period ended March 31, 2006, filed on May 9,
2006; |
|
|
|
our Current Reports on
Form 8-K, filed on
January 6, 2006, March 7, 2006, March 13, 2006,
April 6, 2006 and April 11, 2006; and |
|
|
|
the description of our Series A common stock contained in
our Form 8-A,
filed on January 18, 2005. |
You can request a copy of these filings at no cost, by writing
or calling us at the following address:
Celanese Corporation
1601 West
LBJ Freeway
Dallas,
TX 75234-6034
(972) 443-4000
You should read the information in this prospectus together with
the information in the documents incorporated by reference.
Nothing contained herein shall be deemed to incorporate
information furnished to, but not filed with, the SEC.
1
OUR COMPANY
All references in this prospectus to we,
our and us refer collectively to
Celanese Corporation and its consolidated subsidiaries.
We are an integrated global producer of value-added industrial
chemicals and have the first or second market positions
worldwide in products comprising the majority of our sales. We
are the worlds largest producer of acetyl products,
including acetic acid and vinyl acetate monomer
(VAM), polyacetal products (POM), as
well as a leading global producer of high-performance engineered
polymers used in consumer and industrial products and designed
to meet highly technical customer requirements. Our operations
are located in North America, Europe and Asia. In addition, we
have substantial ventures primarily in Asia. We believe we are
one of the lowest-cost producers of key building block chemicals
in the acetyls chain, such as acetic acid and VAM, due to our
economies of scale, operating efficiencies and proprietary
production technologies. We have a large and diverse global
customer base consisting principally of major companies in a
broad array of industries.
We operate primarily through four business seqments: Chemical
Products, Technical Polymers Ticona, Acetate Products and
Performance Products.
Our Chemical Products segment produces and supplies acetyl
products, including acetic acid, acetate esters, VAM, polyvinyl
alcohol and emulsions. We are a leading global producer of
acetic acid, the worlds largest producer of VAM and the
largest North American producer of methanol, the major raw
material used for the production of acetic acid. We are also the
largest polyvinyl alcohol producer in North America. These
products are generally used as building blocks for value-added
products or in intermediate chemicals used in the paints,
coatings, inks, adhesives, films, textiles and building products
industries. Other chemicals produced in this segment are organic
solvents and intermediates for pharmaceutical, agricultural and
chemical products.
|
|
|
Technical Polymers Ticona |
Our Technical Polymers Ticona segment (Ticona)
develops, produces and supplies a broad portfolio of high
performance technical polymers for use in automotive and
electronics products and in other consumer and industrial
applications, often replacing metal or glass. Together with our
45%-owned venture Polyplastics Co. Ltd
(Polyplastics), our 50%-owned venture Korea
Engineering Plastics Company Ltd., or KEPCO, and Fortron
Industries, our 50-50 venture with Kureha Chemicals Industry of
Japan, we are a leading participant in the global technical
polymers business. The primary products of Ticona are polyacetal
products, or POM, and GUR, an ultra-high molecular weight
polyethylene. POM is used in a broad range of products including
automotive components, electronics and appliances. GUR is used
in battery separators, conveyor belts, filtration equipment,
coatings and medical devices.
Our Acetate Products segment primarily produces and supplies
acetate tow, which is used in the production of filter products.
We are one of the worlds leading producers of acetate tow
including production by our ventures in China. In October 2004,
we announced plans to consolidate our acetate flake and tow
manufacturing by early 2007 and to exit the acetate filament
business, which ceased production in April 2005. This
restructuring has been implemented to increase efficiency,
reduce over-capacities in certain manufacturing areas and to
focus on products and markets that provide long-term value.
The Performance Products segment operates under the trade name
of Nutrinova and produces and sells a high intensity sweetener
and food protection ingredients, such as sorbates, for the food,
beverage and pharmaceuticals industries.
Our principal executive offices are located at 1601 West
LBJ Freeway, Dallas, TX 75234-6034 and our main telephone number
is +1-972-443-4000.
2
SUMMARY
The following summary describes the securities that may be
offered pursuant to this prospectus in general terms only. You
should read the summary together with the more detailed
information contained in the rest of this prospectus and the
applicable prospectus supplement.
|
|
|
Common Stock |
|
We and/or certain selling stockholders may sell shares of our
Series A common stock, par value $.0001 per share. In
a prospectus supplement, we will describe the aggregate number
of shares offered and the offering price or prices of the shares. |
|
Preferred Stock |
|
We may sell our preferred stock, par value $.01 per share,
in one or more series. In a prospectus supplement, we will
describe the specific designation, the aggregate number of
shares offered, the dividend rate or manner of calculating the
dividend rate, the dividend periods or manner of calculating the
dividend periods, the stated value of the shares of the series,
the voting rights of the shares of the series, whether or not
and on what terms the shares of the series will be convertible
or exchangeable, whether and on what terms we can redeem the
shares of the series, whether we will offer depositary shares
representing shares of the series and if so, the fraction or
multiple of a share of preferred stock represented by each
depositary share, whether we will list the preferred stock or
depositary shares on a securities exchange and any other
specific terms of the series of preferred stock. |
|
Terms Specified in
Prospectus Supplement |
|
When we decide to sell particular securities, we will prepare a
prospectus supplement, describing the securities offering and
the specific terms of the securities. You should carefully read
this prospectus and any applicable prospectus supplement. We may
also prepare free writing prospectuses that describe particular
securities. Any free writing prospectus should also be read in
connection with this prospectus and with any other prospectus
supplement referred to therein. For purposes of this prospectus,
any reference to an applicable prospectus supplement may also
refer to a free writing prospectus, unless the context otherwise
requires. |
|
|
|
We will offer our securities to investors on terms determined by
market and other conditions. Our securities may be sold for
U.S. dollars or foreign currency. |
|
|
|
In any prospectus supplement we prepare, we will provide the
name of and compensation to each dealer, underwriter or agent,
if any, involved in the sale of the securities being offered and
the managing underwriters for any securities sold to or through
underwriters. |
3
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated herein by
reference contain certain forward-looking statements and
information relating to us that are based on the beliefs of our
management as well as assumptions made by, and information
currently available to, us. These statements include, but are
not limited to, statements about our strategies, plans,
objectives, expectations, intentions, expenditures, and
assumptions and other statements contained in this prospectus
that are not historical facts. When used in this document, words
such as anticipate, believe,
estimate, expect, intend,
plan and project and similar
expressions, as they relate to us are intended to identify
forward-looking statements. These statements reflect our current
views with respect to future events, are not guarantees of
future performance and involve risks and uncertainties that are
difficult to predict. Further, certain forward-looking
statements are based upon assumptions as to future events that
may not prove to be accurate.
As used in this prospectus, the term Domination
Agreement refers to the domination and profit and loss
transfer agreement between CAG and our subsidiary, Celanese
Europe Holding GmbH & Co. KG, formerly known as BCP
Crystal Acquisition GmbH & Co. KG, a German limited
partnership (Kommanditgesellschaft, KG) (the
Purchaser), pursuant to which the Purchaser became
obligated on October 1, 2004 to offer to acquire all
outstanding ordinary shares of CAG from the minority
shareholders of CAG in return for payment of fair cash
compensation in accordance with German law. Celanese AG is
incorporated as a stock corporation (Aktiengesellschaft,
AG) organized under the laws of the Federal Republic of Germany.
As used in this prospectus, the term CAG refers to
(i) prior to the organizational restructuring of Celanese
and certain of its subsidiaries in October 2004 (the
Restructuring), Celanese AG and Celanese Americas
Corporation, their consolidated subsidiaries, their
non-consolidated subsidiaries, ventures and other investments,
and (ii) following the Restructuring, Celanese AG, its
consolidated subsidiaries, its non-consolidated subsidiaries,
ventures and other investments, except that with respect to
shareholder and similar matters where the context indicates,
CAG refers to Celanese AG.
As used in this prospectus, the term Sponsor refers
to The Blackstone Group. The term Original
Shareholders refers to Blackstone Capital Partners
(Cayman) Ltd. 1, Blackstone Capital Partners (Cayman)
Ltd. 2, Blackstone Capital Partners (Cayman) Ltd. 3 and BA
Capital Investors Sidecar Fund, L.P.
As used in this prospectus, the term second amended and
restated certificate of incorporation refers to our Second
Amended and Restated Certificate of Incorporation. As used in
this prospectus, the term by-laws refers to our
Amended and Restated By-laws.
Many factors could cause our actual results, performance or
achievements to be materially different from any future results,
performance or achievements that may be expressed or implied by
such forward-looking statements. These factors include, among
other things:
|
|
|
|
|
changes in general economic, business, political and regulatory
conditions in the countries or regions in which we operate; |
|
|
|
the length and depth of product and industry business cycles
particularly in the automotive, electrical, electronics and
construction industries; |
|
|
|
changes in the price and availability of raw materials,
particularly changes in the demand for, supply of, and market
prices of fuel oil, natural gas, coal, electricity and
petrochemicals such as ethylene, propylene and butane, including
changes in production quotas in OPEC countries and the
deregulation of the natural gas transmission industry in Europe; |
|
|
|
the ability to pass increases in raw material prices on to
customers or otherwise improve margins through price increases; |
|
|
|
the ability to maintain plant utilization rates and to implement
planned capacity additions and expansions; |
|
|
|
the ability to reduce production costs and improve productivity
by implementing technological improvements to existing plants; |
|
|
|
the existence of temporary industry surplus production capacity
resulting from the integration and
start-up of new
world-scale plants; |
4
|
|
|
|
|
increased price competition and the introduction of competing
products by other companies; |
|
|
|
the ability to develop, introduce and market innovative
products, product grades and applications, particularly in the
Ticona and Performance Products segments of our business; |
|
|
|
changes in the degree of patent and other legal protection
afforded to our products; |
|
|
|
compliance costs and potential disruption or interruption of
production due to accidents or other unforeseen events or delays
in construction of facilities; |
|
|
|
potential liability for remedial actions under existing or
future environmental regulations; |
|
|
|
potential liability resulting from pending or future litigation,
or from changes in the laws, regulations or policies of
governments or other governmental activities in the countries in
which we operate; |
|
|
|
changes in currency exchange rates and interest rates; |
|
|
|
changes in the composition or restructuring of us or our
subsidiaries and the successful completion of acquisitions,
divestitures and venture activities; |
|
|
|
inability to successfully integrate current and future
acquisitions; |
|
|
|
pending or future challenges to the Domination
Agreement; and |
|
|
|
various other factors, both referenced and not referenced in
this prospectus. |
Many of these factors are macroeconomic in nature and are,
therefore, beyond our control. Should one or more of these risks
or uncertainties materialize, or should underlying assumptions
prove incorrect, our actual results, performance or achievements
may vary materially from those described in this prospectus and
the documents incorporated herein by reference as anticipated,
believed, estimated, expected, intended, planned or projected.
We neither intend nor assume any obligation to update these
forward-looking statements, which speak only as of their dates.
5
USE OF PROCEEDS
In the case of a sale of securities by us, the use of proceeds
will be specified in the applicable prospectus supplement. In
the case of a sale of Series A common stock by any selling
stockholders, we will not receive any of the proceeds from such
sale. We will pay all expenses (other than underwriting
discounts or commissions or transfer taxes) of the selling
stockholders in connection with any such offering.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
The following table sets forth our ratio of earnings to combined
fixed charges and preferred stock dividends for the periods
indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Predecessor | |
|
Successor | |
|
|
| |
|
| |
|
|
|
|
|
|
Three Months | |
|
|
Year Ended | |
|
Three Months | |
|
Nine Months | |
|
|
|
Ended | |
|
|
December 31 | |
|
Ended | |
|
Ended | |
|
Year Ended | |
|
March 31, | |
|
|
| |
|
March 31, | |
|
December 31, | |
|
December 31, | |
|
| |
|
|
2001 | |
|
2002 | |
|
2003 | |
|
2004 | |
|
2004 | |
|
2005 | |
|
2005 | |
|
2006 | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Ratio of earnings to combined fixed charges and preferred stock
dividends (1)
|
|
|
|
|
|
|
3.4 |
|
|
|
3.4 |
|
|
|
5.6 |
|
|
|
|
|
|
|
1.8 |
|
|
|
1.2 |
|
|
|
2.9 |
|
|
|
(1) |
For purposes of calculating the ratio of earnings to combined
fixed charges and preferred stock dividends, earnings is the
amount resulting from (1) adding (a) earnings (loss)
from continuing operations before tax and minority interests,
(b) income distributions from equity investments,
(c) amortization of capitalized interest and (d) fixed
charges equity in net earnings of affiliates and
(2) subtracting equity in net earnings of affiliates. Fixed
charges is the sum of (w) interest expense,
(x) capitalized interest, (y) estimated interest
portion of rent expense and (z) guaranteed payment to CAG
minority shareholders. Preferred stock dividend is the amount of
cumulative undeclared and declared preferred stock dividends.
See our reports on file with the SEC pursuant to the Securities
Exchange Act of 1934, as described under Available
Information, for more information. |
6
DESCRIPTION OF CAPITAL STOCK
The following is a description of the material provisions of
our capital stock, as well as other material terms of our second
amended and restated certificate of incorporation and by-laws.
We refer you to our second amended and restated certificate of
incorporation and to our amended and restated by-laws, copies of
which have been filed as exhibits to the registration statement
of which this prospectus forms a part.
Authorized Capitalization
As of April 3, 2006, our authorized capital stock consisted
of (i) 500,000,000 shares of common stock, par value
$.0001 per share, consisting of 400,000,000 shares of
Series A common stock of which 158,562,161 shares were
issued and outstanding and 100,000,000 shares of
Series B common stock of which none were issued and
outstanding, and (ii) 100,000,000 shares of preferred
stock, par value $.01 per share, of which 9,600,000 were
designated convertible perpetual preferred stock and were issued
and outstanding. Following the payment of a special dividend to
holders of our Series B common stock in April 2005, all of
the then outstanding shares of Series B common stock
automatically converted into shares of our Series A common
stock pursuant to our second amended and restated certificate of
incorporation.
Voting Rights. Holders of common stock are entitled to
one vote per share on all matters with respect to which the
holders of common stock are entitled to vote. The holders of the
Series A common stock and Series B common stock will
vote as a single class on all matters with respect to which the
holders of common stock are entitled to vote, except as
otherwise required by law and except that, in addition to any
other vote of stockholders required by law, the approval of the
holders of a majority of the outstanding shares of Series B
common stock, voting as a separate class, is also required to
approve any amendment to our second amended and restated
certificate of incorporation or by-laws, whether by merger,
consolidation or otherwise by operation of law, which would
adversely affect the rights of the Series B common stock.
The holders of common stock do not have cumulative voting rights
in the election of directors.
Dividend Rights. Holders of common stock are entitled to
receive dividends if, as and when dividends are declared from
time to time by our board of directors out of funds legally
available for that purpose, after payment of dividends required
to be paid on outstanding preferred stock, as described below,
if any. Our senior credit facilities and indentures impose
restrictions on our ability to declare dividends with respect to
our common stock. Any decision to declare and pay dividends in
the future will be made at the discretion of our board of
directors and will depend on, among other things, our results of
operations, cash requirements, financial condition, contractual
restrictions and factors that our board of directors may deem
relevant.
Liquidation Rights. Upon liquidation, dissolution or
winding up, the holders of common stock will be entitled to
receive ratably the assets available for distribution to the
stockholders after payment of liabilities and accrued but unpaid
dividends and liquidation preferences on any outstanding
preferred stock.
Other Matters. The common stock has no preemptive rights
and, if fully paid, is not subject to further calls or
assessment by us. There are no redemption or sinking fund
provisions applicable to our common stock. All shares of our
common stock that will be outstanding at the time of the
completion of the offering will be fully paid and
non-assessable, and the shares of our Series A common stock
offered in this offering, upon payment and delivery in
accordance with the underwriting agreement, will be fully paid
and non-assessable.
7
Our second amended and restated certificate of incorporation
authorizes our board of directors to establish one or more
series of preferred stock and to determine, with respect to any
series of preferred stock, the terms and rights of that series,
including:
|
|
|
|
|
the designation of the series; |
|
|
|
the number of shares of the series, which our board of directors
may, except where otherwise provided in the preferred stock
designation, increase (but not above the total number of
authorized shares of the class) or decrease (but not below the
number of shares then outstanding); |
|
|
|
whether dividends, if any, will be cumulative or non-cumulative
and the dividend rate of the series; |
|
|
|
the dates at which dividends, if any, will be payable; |
|
|
|
the redemption rights and price or prices, if any, for shares of
the series; |
|
|
|
the terms and amounts of any sinking fund provided for the
purchase or redemption of shares of the series; |
|
|
|
the amounts payable on shares of the series in the event of any
voluntary or involuntary liquidation, dissolution or
winding-up of the
affairs of our company; |
|
|
|
whether the shares of the series will be convertible into shares
of any other class or series, or any other security, of our
company or any other corporation, and, if so, the specification
of the other class or series or other security, the conversion
price or prices or rate or rates, any rate adjustments, the date
or dates as of which the shares will be convertible and all
other terms and conditions upon which the conversion may be made; |
|
|
|
restrictions on the issuance of shares of the same series or of
any other class or series; and |
|
|
|
the voting rights, if any, of the holders of the series. |
For a description of our existing convertible perpetual
preferred stock, see Description of Existing Convertible
Perpetual Preferred Stock.
Anti-Takeover Effects of Certain Provisions of Our Second
Amended and Restated Certificate of Incorporation and By-laws
Certain provisions of our second amended and restated
certificate of incorporation and by-laws, which are summarized
in the following paragraphs, may have an anti-takeover effect
and may delay, defer or prevent a tender offer or takeover
attempt that a stockholder might consider in its best interest,
including those attempts that might result in a premium over the
market price for the shares held by stockholders.
Classified Board of Directors
Our second amended and restated certificate of incorporation
provides that our board of directors will be divided into three
classes of directors, with the classes to be as nearly equal in
number as possible. The members of each class serve for a
three-year term. As a result, approximately one-third of our
board of directors will be elected each year. The classification
of directors will have the effect of making it more difficult
for stockholders to change the composition of our board of
directors. Our second amended and restated certificate of
incorporation and the by-laws provide that the number of
directors will be fixed from time to time pursuant to a
resolution adopted by the board of directors, but must consist
of not less than seven or more than fifteen directors.
Conflicts of Interest
Delaware law permits corporations to adopt provisions renouncing
any interest or expectancy in certain opportunities that are
presented to the corporation or its officers, directors or
stockholders. Our second amended and restated certificate of
incorporation renounces any interest or expectancy that we have
in, or
8
right to be offered an opportunity to participate in, specified
business opportunities. Our second amended and restated
certificate of incorporation provides that none of the Original
Shareholders (including the Sponsor) or their affiliates or any
director who is not employed by us (including any non-employee
director who serves as one of our officers in both his director
and officer capacities) or his or her affiliates has any duty to
refrain from (i) engaging in a corporate opportunity in the
same or similar lines of business in which we or our affiliates
now engage or propose to engage or (ii) otherwise competing
with us. In addition, in the event that any Original Shareholder
(including the Sponsor) or any non-employee director acquires
knowledge of a potential transaction or other business
opportunity which may be a corporate opportunity for itself or
himself or its or his affiliates and for us or our affiliates,
such Original Shareholder or non-employee director will have no
duty to communicate or offer such transaction or business
opportunity to us and may take any such opportunity for
themselves or offer it to another person or entity. Our second
amended and restated certificate of incorporation does not
renounce our interest in any business opportunity that is
expressly offered to a non-employee director solely in his or
her capacity as a director or officer of Celanese Corporation.
No business opportunity offered to any non-employee director
will be deemed to be a potential corporate opportunity for us
unless we would be permitted to undertake the opportunity under
our second amended and restated certificate of incorporation, we
have sufficient financial resources to undertake the opportunity
and the opportunity would be in line with our business.
Removal of Directors
Our second amended and restated certificate of incorporation and
by-laws provide that (i) prior to the date on which the
Sponsor and its affiliates cease to beneficially own, in
aggregate, at least 50.1% in voting power of all outstanding
shares entitled to vote generally in the election of directors,
directors may be removed with or without cause upon the
affirmative vote of holders of at least a majority of the voting
power of all the then outstanding shares of stock entitled to
vote generally in the election of directors, voting together as
a single class and (ii) on and after the date the Sponsor
and its affiliates cease to beneficially own, in aggregate, at
least 50.1% in voting power of all outstanding shares entitled
to vote generally in the election of directors, directors may be
removed only for cause and only upon the affirmative vote of
holders of at least 80% of the voting power of all the then
outstanding shares of stock entitled to vote generally in the
election of directors, voting together as a single class. In
addition, our second amended and restated certificate of
incorporation also provides that any newly created directorships
and any vacancies on our board of directors will be filled only
by the affirmative vote of the majority of remaining directors;
provided that so long as affiliates of our Sponsor own at least
25% of the total voting power of our capital stock, such
positions can only be filled by our stockholders.
No Cumulative Voting
The Delaware General Corporation Law, or the DGCL, provides that
stockholders are not entitled to the right to cumulate votes in
the election of directors unless our second amended and restated
certificate of incorporation provides otherwise. Our second
amended and restated certificate of incorporation does not
expressly provide for cumulative voting.
Calling of Special Meetings of Stockholders
Our second amended and restated certificate of incorporation
provides that a special meeting of our stockholders may be
called at any time only by the chairman of the board of
directors, the board or a committee of the board of directors
which has been granted such authority by the board.
Stockholder Action by Written Consent
The DGCL permits stockholder action by written consent unless
otherwise provided by the second amended and restated
certificate of incorporation. Our second amended and restated
certificate of incorporation precludes stockholder action by
written consent after the date on which the Sponsor and its
affiliates ceases to beneficially own, in the aggregate, at
least 50.1% in voting power of all outstanding shares of our
stock entitled to vote generally in the election of directors.
9
Advance Notice Requirements for Stockholder Proposals and
Director Nominations
Our by-laws provide that stockholders seeking to nominate
candidates for election as directors or to bring business before
an annual meeting of stockholders must provide timely notice of
their proposal in writing to the corporate secretary.
Generally, to be timely, a stockholders notice must be
received at our principal executive offices not less than
90 days nor more than 120 days prior to the first
anniversary date on which the proxy materials for the previous
years annual meeting were first mailed. Our by-laws also
specify requirements as to the form and content of a
stockholders notice. These provisions, which do not apply
to the Sponsor and its affiliates, may impede stockholders
ability to bring matters before an annual meeting of
stockholders or make nominations for directors at an annual
meeting of stockholders.
Supermajority Provisions
The DGCL provides generally that the affirmative vote of a
majority of the outstanding shares entitled to vote is required
to amend a corporations certificate of incorporation or
by-laws, unless the certificate of incorporation requires a
greater percentage. Our second amended and restated certificate
of incorporation provides that the following provisions in the
second amended and restated certificate of incorporation and
by-laws may be amended only by a vote of at least 80% of the
voting power of all of the outstanding shares of our stock
entitled to vote in the election of directors, voting together
as a single class:
|
|
|
|
|
classified board (the election and term of our directors); |
|
|
|
the resignation and removal of directors; |
|
|
|
the provisions regarding stockholder action by written consent; |
|
|
|
the ability to call a special meeting of stockholders being
vested solely in our board of directors, a committee of our
board of directors (if duly authorized to call special
meetings), and the chairman of our board of directors; |
|
|
|
filling of vacancies on our board of directors and newly created
directorships; |
|
|
|
the advance notice requirements for stockholder proposals and
director nominations; and |
|
|
|
the amendment provision requiring that the above provisions be
amended only with an 80% supermajority vote. |
In addition, our second amended and restated certificate of
incorporation grants our board of directors the authority to
amend and repeal our by-laws without a stockholder vote in any
manner not inconsistent with the laws of the State of Delaware
or our second amended and restated certificate of incorporation.
Limitations on Liability and Indemnification of Officers and
Directors
The DGCL authorizes corporations to limit or eliminate the
personal liability of directors to corporations and their
stockholders for monetary damages for breaches of
directors fiduciary duties. Our second amended and
restated certificate of incorporation includes a provision that
eliminates the personal liability of directors for monetary
damages for actions taken as a director, except for liability:
|
|
|
|
|
for breach of duty of loyalty; |
|
|
|
for acts or omissions not in good faith or involving intentional
misconduct or knowing violation of law; |
|
|
|
under Section 174 of the DGCL (unlawful dividends or stock
repurchases and redemptions); or |
|
|
|
for transactions from which the director derived improper
personal benefit. |
Our second amended and restated certificate of incorporation and
by-laws provide that we must indemnify our directors and
officers to the fullest extent authorized by the DGCL. We are
also expressly authorized to advance certain expenses (including
attorneys fees and disbursements and court costs) and
10
carry directors and officers insurance providing
indemnification for our directors, officers and certain
employees for some liabilities. We believe that these
indemnification provisions and insurance are useful to attract
and retain qualified directors and executive officers.
The limitation of liability and indemnification provisions in
our second amended and restated certificate of incorporation and
by-laws may discourage stockholders from bringing a lawsuit
against directors for breach of their fiduciary duty. These
provisions may also have the effect of reducing the likelihood
of derivative litigation against directors and officers, even
though such an action, if successful, might otherwise benefit us
and our stockholders. In addition, your investment may be
adversely affected to the extent we pay the costs of settlement
and damage awards against directors and officers pursuant to
these indemnification provisions.
There is currently no pending material litigation or proceeding
involving any of our directors, officers or employees for which
indemnification is sought.
Delaware Anti-takeover Statute
We are a Delaware corporation and are subject to
Section 203 of the DGCL. Subject to specified exceptions,
Section 203 prohibits a publicly held Delaware corporation
from engaging in a business combination with an
interested stockholder for a period of three years
after the date of the transaction in which the person became an
interested stockholder. Business combinations
include mergers, asset sales and other transactions resulting in
a financial benefit to the interested stockholder.
Subject to various exceptions, an interested
stockholder is a person who together with his or her
affiliates and associates, owns, or within three years did own,
15% or more of the corporations outstanding voting stock.
These restrictions generally prohibit or delay the
accomplishment of mergers or other takeover or change in control
attempts.
Transfer Agent and Registrar
Computershare Trust Company, N.A. (formerly Equiserve Trust
Company, N.A.) is the transfer agent and registrar for our
Series A common stock.
Listing
Our Series A common stock is listed on the New York Stock
Exchange under the symbol CE.
Authorized but Unissued Capital Stock
The DGCL does not require stockholder approval for any issuance
of authorized shares. However, the listing requirements of the
New York Stock Exchange, which would apply so long as our
Series A common stock is listed on the New York Stock
Exchange, require stockholder approval of certain issuances
equal to or exceeding 20% of the then-outstanding voting power
or then outstanding number of shares of common stock. These
additional shares may be used for a variety of corporate
purposes, including future public offerings, to raise additional
capital or to facilitate acquisitions.
One of the effects of the existence of unissued and unreserved
common stock may be to enable our board of directors to issue
shares to persons friendly to current management, which issuance
could render more difficult or discourage an attempt to obtain
control of our company by means of a merger, tender offer, proxy
contest or otherwise, and thereby protect the continuity of our
management and possibly deprive the stockholders of
opportunities to sell their shares of common stock at prices
higher than prevailing market prices.
11
DESCRIPTION OF EXISTING CONVERTIBLE PERPETUAL PREFERRED
STOCK
General
The existing preferred stock is a single series of preferred
stock consisting of 9,600,000 shares. The existing
preferred stock ranks junior to all of our and our
subsidiaries existing and future obligations and senior in
right of payment to all of our common stock now outstanding or
to be issued in the future. We are not entitled to issue any
class or series of our capital stock the terms of which provide
that such class or series will rank senior to the existing
preferred stock without the consent of the holders of at least
two-thirds of the outstanding shares of the existing preferred
stock.
Dividends
Holders of the shares of existing preferred stock are entitled
to receive, when, as and if declared by our board of directors,
out of funds legally available for payment, cumulative cash
dividends on each outstanding share of existing preferred stock
at the annual rate of 4.25% of the liquidation preference per
share. Dividends are payable quarterly in arrears on
February 1, May 1, August 1 and November 1
of each year, beginning on May 1, 2005. Accumulated unpaid
dividends cumulate at the annual rate of 4.25% and are payable
in the manner provided above.
For so long as the existing preferred stock remains outstanding,
(1) we will not declare, pay or set apart funds for the
payment of any dividend or other distribution with respect to
any junior stock or parity stock except for the special
Series B common stock dividends and (2) neither we,
nor any of our subsidiaries, will, subject to certain
exceptions, redeem, purchase or otherwise acquire for
consideration junior stock or parity stock through a sinking
fund or otherwise, in each case unless we have paid or set apart
funds for the payment of all accumulated and unpaid dividends
with respect to the shares of preferred stock and any parity
stock for all preceding dividend periods.
Conversion Rights
Holders of the existing preferred stock may, at any time,
convert shares of existing preferred stock into shares of our
Series A common stock at a conversion rate of
1.25 shares of Series A common stock per $25
liquidation preference of existing preferred stock, subject to
certain adjustments.
If a holder of shares of existing preferred stock exercises
conversion rights, upon delivery of the shares for conversion,
those shares will cease to cumulate dividends as of the end of
the day immediately preceding the date of conversion. Holders of
shares of existing preferred stock who convert their shares into
our Series A common stock will not be entitled to, nor will
the conversion rate be adjusted for, any accumulated and unpaid
dividends.
We will at all times reserve and keep available, free from
preemptive rights, for issuance upon the conversion of shares of
existing preferred stock a number of our authorized but unissued
shares of Series A common stock that will from time to time
be sufficient to permit the conversion of all outstanding shares
of existing preferred stock.
Make Whole Payment Upon the Occurrence of a Fundamental
Change
If the holder of the existing preferred stock elects to convert
its existing preferred stock upon the occurrence of a
fundamental change (a transaction or event that involves the
exchange, conversion or acquisition in connection with which 90%
or more of our share of Series A common stock are exchanged
for, converted into, acquired for or constitute solely the right
to receive, consideration that is not at least 90% shares of
common stock that is not traded on a national securities
exchange or approved for quotation thereof in an interdealer
quotation system of any registered United States national
securities exchange) that occurs prior to February 1, 2015,
in certain circumstances, the holder of the existing preferred
stock will be entitled to receive, in addition to a number of
shares of Series A common stock equal to the applicable
conversion rate, an additional number of shares of Series A
common stock. In no event will the total number of shares
12
of Series A common stock issuable upon conversion exceed
1.5625 per $25 liquidation preference per share of
preferred stock, subject to adjustments in the same manner as
the conversion rate.
Adjustments to the Conversion Rate
The conversion rate is subject to adjustment from time to time
if any of the following events occur: the issuance of common
stock as a dividend, a distribution of our common stock, certain
subdivisions and combinations of our common stock, the issuance
to holders of our common stock of certain rights or warrants to
purchase common stock, certain dividends or distributions of
capital stock, evidences of indebtedness, other assets or cash
to holders of common stock, or under certain circumstances, a
payment we make in respect of a tender offer or exchange offer
for our common stock.
We may adopt a rights agreement following consummation of this
offering, pursuant to which certain rights would be issued with
respect to our shares of Series A common stock. In certain
circumstances, the holder of the existing preferred stock would
receive, upon conversion of its existing preferred stock, in
addition to the Series A common stock, the rights under any
such rights agreement (if adopted) or any other rights plan then
in effect.
Optional Redemption
We may not redeem any shares of existing preferred stock before
February 1, 2010. On or after February 1, 2010, we
will have the option to redeem some or all the shares of
existing preferred stock at a redemption price of 100% of the
liquidation preference, plus an amount equal to accumulated and
unpaid dividends to the redemption date, but only if the closing
sale price of our Series A common stock for 20 trading days
within a period of 30 consecutive trading days ending on
the trading day before the date we give the redemption notice
exceeds 130% of the conversion price in effect on each such day.
In addition, if on or after February 1, 2010, on any
quarterly dividend payment date, the total number of shares of
existing preferred stock outstanding is less than 15% of the
total number of shares of the existing preferred stock
outstanding at the time of this offering, we will have the
option to redeem the shares of outstanding existing preferred
stock, in whole but not in part, at a redemption price of 100%
of the liquidation preference, plus an amount equal to
accumulated and unpaid dividends to the redemption date. If full
cumulative dividends on the existing preferred stock have not
been paid, the existing preferred stock may not be redeemed and
we may not purchase or acquire any shares of existing preferred
stock otherwise than pursuant to a purchase or exchange offer
made on the same terms to all holders of existing preferred
stock and any parity stock.
Designated Event
If a designated event occurs, each holder of shares of existing
preferred stock will have the right to require us, subject to
legally available funds, to redeem any or all of its shares at a
redemption price equal to 100% of the liquidation preference,
plus accumulated and unpaid dividends to, but excluding, the
date of redemption. We may choose to pay the redemption price in
cash, shares of Series A common stock, or a combination
thereof. If we elect to pay all or a portion of the redemption
price in shares of Series A common stock, the shares of
Series A common stock will be valued at a discount of 2.5%
below the average of the closing sale prices for the ten
consecutive trading days ending on the fifth trading day prior
to the redemption date. Our ability to redeem all or a portion
of the existing preferred stock for cash is subject to our
obligation to repay or repurchase any outstanding debt that may
be required to be repaid or repurchased in connection with a
designated event and to any contractual restrictions contained
in the terms of any indebtedness that we have at that time. If,
following a designated event, we are prohibited from paying the
redemption price of the existing preferred stock in cash under
the terms of our debt instruments, but are not prohibited under
applicable law from paying such redemption price in our shares
of Series A common stock, we will pay the redemption price
of the existing preferred stock in our shares of Series A
common stock. However, in no event will we be required to
deliver more than 240,000,000 shares of Series A
common stock in satisfaction of the redemption price (subject to
adjustment).
13
Voting Rights
Unless otherwise determined by our board of directors, holders
of shares of existing preferred stock will not have any voting
rights except as described below, as provided in our second
amended and restated certificate of incorporation or as
otherwise required from time to time by law. Whenever
(1) dividends on any shares of the existing preferred stock
or any other class or series of stock ranking on a parity with
the existing preferred stock with respect to the payment of
dividends shall be in arrears for dividend periods, whether or
not consecutive, containing in the aggregate a number of days
equivalent to six calendar quarters or (2) we fail to pay
the redemption price on the date shares of existing preferred
stock are called for redemption (whether the redemption is
pursuant to the optional redemption provisions or the redemption
is in connection with a designated event) then, immediately
prior to the next annual meeting of shareholders, the total
number of directors constituting the entire board will
automatically be increased by two and in each case, the holders
of shares of existing preferred stock (voting separately as a
class with all other series of other preferred stock on parity
with the preferred stock upon which like voting rights have been
conferred and are exercisable) will be entitled to vote for the
election of such directors at the next annual meeting of
stockholders and each subsequent meeting until the redemption
price or all dividends accumulated on the preferred stock have
been fully paid or set aside for payment. Directors elected by
the holders of the existing preferred stock shall not be divided
into the classes of the board of directors and the term of
office of all directors elected by the holders of existing
preferred stock will terminate immediately upon the termination
of the right of the holders of existing preferred stock to vote
for directors and upon such termination the total number of
directors constituting the entire board will automatically be
reduced by two. Each holder of shares of the existing preferred
stock will have one vote for each share of existing preferred
stock held.
So long as any shares of the existing preferred stock remain
outstanding, we will not, without the consent of the holders of
at least two-thirds of the shares of existing preferred stock
outstanding at the time, voting separately as a class with all
other series of preferred stock upon which like voting rights
have been conferred and are exercisable issue or increase the
authorized amount of any class or series of stock ranking senior
to the outstanding preferred stock as to dividends or upon
liquidation. In addition, we will not amend, alter or repeal
provisions of our second amended and restated certificate of
incorporation or of the resolutions contained in the certificate
of designations, whether by merger, consolidation or otherwise,
so as to amend, alter or adversely affect any power, preference
or special right of the outstanding preferred stock or the
holders thereof without the affirmative vote of not less than
two-thirds of the issued and outstanding preferred stock;
provided, however, that any increase in the amount of the
authorized Series A common stock or authorized preferred
stock or the creation and issuance of other series of
Series A common stock or preferred stock ranking on a
parity with or junior to the existing preferred stock as to
dividends and upon liquidation will not be deemed to adversely
affect such powers, preference or special rights.
Liquidation Preference
In the event of our liquidation, dissolution or winding up, the
holders of existing preferred stock will be entitled to receive
out of our assets available for distribution of an amount equal
to the liquidation preference per share of existing preferred
stock held by that holder, plus an amount equal to all
accumulated and unpaid dividends on those shares to the date of
that liquidation, dissolution, or winding up, before any
distribution is made on any junior stock, including our
Series A common stock, but after any distributions on any
of our indebtedness.
Listing
Our existing 4.25% convertible perpetual preferred stock is
listed on the New York Stock Exchange under the symbol
CE Pr.
14
DESCRIPTION OF OFFERED PREFERRED STOCK
General
The following description sets forth some general terms and
provisions of the preferred stock we may offer pursuant to this
prospectus. The number of shares and all of the relative rights,
preferences and limitations of the respective series of offered
preferred stock that the board of directors or the committee
establishes will be described in the applicable prospectus
supplement. The terms of particular series of offered preferred
stock may differ, among other things, in:
|
|
|
|
|
designation; |
|
|
|
number of shares that constitute the series; |
|
|
|
dividend rate, or the method of calculating the dividend rate; |
|
|
|
dividend periods, or the method of calculating the dividend
periods; |
|
|
|
redemption provisions, including whether or not, on what terms
and at what prices the shares will be subject to redemption at
our option; |
|
|
|
voting rights; |
|
|
|
preferences and rights upon liquidation or winding up; |
|
|
|
whether or not and on what terms the shares will be convertible
into or exchangeable for shares of any other class, series or
security of ours or any other corporation or any other property; |
|
|
|
for preferred stock convertible into common stock, the number of
shares of common stock to be reserved in connection with, and
issued upon conversion of, the preferred stock; |
|
|
|
whether depositary shares representing the offered preferred
stock will be offered and, if so, the fraction or multiple of a
share that each depositary share will represent; and |
|
|
|
the other rights and privileges and any qualifications,
limitations or restrictions of those rights or privileges. |
The preferred stock, when issued, will be fully paid and
non-assessable. Unless the applicable prospectus supplement
provides otherwise, the preferred stock will have no preemptive
rights to subscribe for any additional securities which may be
issued by us in the future. The transfer agent and registrar for
the preferred stock and any depositary shares will be specified
in the applicable prospectus supplement.
We may elect to offer depositary shares represented by
depositary receipts. If we so elect, each depositary share will
represent a fractional interest in a share of preferred stock
with the amount of the fractional interest to be specified in
the applicable prospectus supplement. If we issue depositary
shares representing interests in shares of preferred stock,
those shares of preferred stock will be deposited with a
depositary.
The shares of any series of preferred stock underlying the
depositary shares will be deposited under a separate deposit
agreement between us and a bank or trust company having its
principal office in the United States and having a combined
capital and surplus of at least $50 million. The applicable
prospectus supplement will set forth the name and address of the
depositary. Subject to the terms of the deposit agreement, each
owner of a depositary share will have a fractional interest in
all the rights and preferences of the preferred stock underlying
the depositary share. Those rights include any dividend, voting,
redemption, conversion and liquidation rights.
The depositary shares will be evidenced by depositary receipts
issued under the deposit agreement. If you purchase fractional
interests in shares of the related series of preferred stock,
you will receive depositary receipts as described in the
applicable prospectus supplement. While the final depositary
receipts are being prepared, we may order the depositary to
issue temporary depositary receipts substantially identical to
the final depositary receipts although not in final form. The
holders of the temporary depositary receipts will be entitled to
the same rights as if they held the depositary receipts in final
form. Holders of the temporary depositary receipts can exchange
them for the final depositary receipts at our expense.
15
PLAN OF DISTRIBUTION
We and/or the selling stockholders, if applicable, may sell the
securities in any of three ways (or in any combination):
|
|
|
|
|
through underwriters or dealers; |
|
|
|
directly to a limited number of purchasers or to a single
purchaser; or |
|
|
|
through agents. |
The prospectus supplement will set forth the terms of the
offering of such securities, including
|
|
|
|
|
the name or names of any underwriters, dealers or agents and the
amounts of securities underwritten or purchased by each of
them, and |
|
|
|
the public offering price of the securities and the proceeds to
us and/or the selling stockholders, if applicable, and any
discounts, commissions or concessions allowed or reallowed or
paid to dealers. |
Any public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time
to time.
We and/or the selling stockholders, if applicable, may effect
the distribution of the securities from time to time in one or
more transactions either:
|
|
|
|
|
at a fixed price or at prices that may be changed; |
|
|
|
at market prices prevailing at the time of sale; |
|
|
|
at prices relating to such prevailing market prices; or |
|
|
|
at negotiated prices. |
If underwriters are used in the sale of any securities, the
securities will be acquired by the underwriters for their own
account and may be resold from time to time in one or more
transactions, including negotiated transactions, at a fixed
public offering price or at varying prices determined at the
time of sale. The securities may be either offered to the public
through underwriting syndicates represented by managing
underwriters, or directly by underwriters. Generally, the
underwriters obligations to purchase the securities will
be subject to certain conditions precedent. The underwriters
will be obligated to purchase all of the securities if they
purchase any of the securities (other than any securities
purchased upon exercise of any over-allotment option).
We and/or the selling stockholders, if applicable, may sell the
securities through agents from time to time. The prospectus
supplement will name any agent involved in the offer or sale of
the securities and any commissions paid to them. Generally, any
agent will be acting on a best efforts basis for the period of
its appointment.
Any underwriters, broker-dealers and agents that participate in
the distribution of the securities may be deemed to be
underwriters as defined in the Securities Act. Any
commissions paid or any discounts or concessions allowed to any
such persons, and any profits they receive on resale of the
securities, may be deemed to be underwriting discounts and
commissions under the Securities Act. We will identify any
underwriters or agents and describe their compensation in a
prospectus supplement. Maximum compensation to any underwriters,
dealers or agents will not exceed 8% of the maximum aggregate
offering proceeds.
Underwriters or agents may purchase and sell the securities in
the open market. These transactions may include over-allotment,
stabilizing transactions, syndicate covering transactions and
penalty bids. Over-allotment involves sales in excess of the
offering size, which creates a short position. Stabilizing
transactions consist of bids or purchases for the purpose of
preventing or retarding a decline in the market price of the
securities and are permitted so long as the stabilizing bids do
not exceed a specified maximum. Syndicate covering transactions
involve the placing of any bid on behalf of the underwriting
syndicate or the effecting of any purchase to reduce a short
position created in connection with the offering. The
underwriters or agents also may impose a penalty bid, which
permits them to reclaim selling concessions allowed to syndicate
16
members or certain dealers if they repurchase the securities in
stabilizing or covering transactions. These activities may
stabilize, maintain or otherwise affect the market price of the
securities, which may be higher than the price that might
otherwise prevail in the open market. These activities, if
begun, may be discontinued at any time. These transactions may
be effected on any exchange on which the securities are traded,
in the over-the-counter
market or otherwise.
Our Series A common stock is listed on the New York Stock
Exchange under the symbol CE.
Agents and underwriters may be entitled to indemnification by us
and the selling stockholders against certain civil liabilities,
including liabilities under the Securities Act, or to
contribution with respect to payments which the agents or
underwriters may be required to make in respect thereof.
Agents and underwriters may be customers of, engage in
transactions with, or perform services for us in the ordinary
course of business.
The specific terms of the
lock-up provisions in
respect of any given offering will be described in the
applicable prospectus supplement.
VALIDITY OF THE SECURITIES
The validity of the securities to be sold hereunder will be
passed upon for us by Simpson Thacher & Bartlett LLP,
New York, New York or other counsel who is satisfactory to us. A
private investment fund comprised of selected partners of
Simpson Thacher & Bartlett LLP, members of their
families, related parties and others owns an interest
representing less than 1% of the capital commitments of funds
affiliated with our largest shareholder, The Blackstone Group.
EXPERTS
The consolidated balance sheets of Celanese Corporation and
subsidiaries as of December 31, 2005 and 2004, and the
related consolidated statements of operations,
shareholders equity (deficit), and cash flows for the year
ended December 31, 2005 and the nine-month period ended
December 31, 2004, and related financial statement
schedules, have been incorporated by reference in the
registration statement in reliance upon the reports of KPMG LLP,
independent registered public accounting firm incorporated by
reference herein, and upon the authority of said firm as experts
in accounting and auditing. The report of the independent
registered public accounting firm covering these consolidated
financial statements contains an explanatory paragraph that
states that as a result of the acquisition by a subsidiary of
Celanese Corporation of 84.3% of the outstanding stock of CAG in
a business combination effective April 1, 2004 (a
convenience date for the April 6, 2004 acquisition date),
the consolidated financial information for the periods after the
acquisition is presented on a different cost basis than that for
the periods before the acquisition and, therefore, is not
comparable.
The consolidated statements of operations, shareholders
equity and cash flows of Celanese AG and subsidiaries for the
three-month period ended March 31, 2004 and the year ended
December 31, 2003, incorporated by reference in the
registration statement in reliance upon the report of KPMG
Deutsche Treuhand-Gesellschaft Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft, independent registered
public accounting firm, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and
auditing. The report of the independent registered public
accounting firm covering these consolidated financial statements
contains explanatory paragraphs that state that (a) CAG
changed from using the
last-in, first-out, or
LIFO, method of determining cost of inventories at certain
locations to the
first-in, first-out or
FIFO method and adopted Financial Accounting Standards Board
Interpretation No. 46 (Revised), Consolidation of
Variable Interest Entitiesan interpretation of ARB
No. 51, effective December 31, 2003, and
(b) the independent registered public accounting firm also
has reported separately on the consolidated financial statements
of CAG for the year ended December 31, 2003 which were
presented separately using the euro as the reporting currency.
17