Dow plans to use Kuwait payment to pay off debt

MIDLAND (AP) -- The Dow Chemical Co. said last Friday that it plans to use part of its recent payment from Petrochemical Industries Co. of Kuwait to pay off up to $2 billion in debt this year.

Earlier this month, Dow received a $2.2 billion from that company to cover damages stemming from its 2008 withdrawal from a $17.4 billion joint venture with Dow days before it was set to launch.

The Midland, Mich.-based chemical company said last Friday that it's also looking at other ways to reduce high-cost debt. The company said that once complete, its current and planned moves are expected to reduce its annual interest costs by more than $100 million.

With last Friday's plans, Dow's second-quarter debt-reduction activities total nearly $1.6 billion. The moves include the planned redemption of $1.25 billion of outstanding 5.9 percent notes due in 2015. The company said it also will redeem certain outstanding InterNotes and tax exempt bonds by the end of the quarter.

Additional debt-reduction activities of up to $400 million are planned for the second half of the year, Dow said.

Dow shares fell 14 cents to $34.96 in midday trading last Friday. Its shares hit a 52-week high of $36 last Wednesday. They traded as low as $27.45 in November 2012.

Published: Tue, May 28, 2013