Dow Chemical says still awaiting Kuwait arbitration payout
NEW YORK Feb 28 (Reuters) - Dow Chemical Co said it remains unclear how much in interest and other costs will be added to an expected $2.16 billion arbitration payment from a Kuwaiti firm that scuttled a 2008 joint venture, information that had been expected by Thursday.
In late 2008 Dow Chemical planned a $17.4 billion joint venture with Petrochemical Industries Co (PIC) of Kuwait to spin off its basics plastics business into a stand-alone company called K-Dow.
PIC pulled out of the deal in December 2008, citing the then-deteriorating global economy. An arbitrator ruled last year that PIC was at fault and owed Dow Chemical $2.16 billion, plus interest and costs.
The funds are crucial to Dow Chemical's plans to cull its $20.99 billion debt load, more than half its market value.
Dow Chemical CEO Andrew Liveris told investors on a January 31 conference call that interest and costs were not included in that award. "We are now simply awaiting the release of the final award to the parties, which we expect to receive in February," Liveris said.
On Thursday Dow clarified that the company did not expect to receive a full payment by the end of the month, but rather information about how much interest and other costs would be added to the $2.16 billion award.
Dow Chemical has not received that information, nor the final payout, spokeswoman Nancy Lamb said.
Information on the amount of the final award should come in "the near future," Lamb said, noting the company hopes to get nearly $2.5 billion.
Lamb declined to comment when asked when Midland, Michigan-based Dow Chemical expected final payout.
"We have every reason to believe that PIC will honor its contractual commitment," Lamb said.
PIC, a unit of the Kuwait Petroleum Corp, was not immediately available to comment outside of business hours.
Dow Chemical and PIC currently operate three other joint ventures, including ME Global, EQUATE and Kuwait Olefins Co.
The December 2008 cancellation of the K-Dow joint venture had raised fears at the time among investors that Dow Chemical would be unable to finance its planned $15 billion purchase of specialty chemicals maker Rohm & Haas, a key plank in Liveris' strategy to shift the company toward the higher margin business.
That deal only closed in mid-2009 after Dow and Rohm & Haas altered the terms, avoiding a trial at the last minute that had been filed by Rohm.
Shares of Dow Chemical fell 0.5 percent to $31.65 in Thursday trading.