Explanatory Note
This Current Report on Form 8-K/A (this “Current Report”) amends the Current Report on Form 8-K filed by Trinseo PLC (the “Company”) with the Securities and Exchange Commission on September 30, 2024 (the “Original Report”) and is being filed in order to update the Company’s disclosure under Item 2.05 of the Original Report to correct the restructuring charges related to the Company’s 2024 Restructuring Plan. The Original Report otherwise remains unchanged.
ITEM 2.05 Costs Associated with Exit or Disposal Activities.
As previously disclosed in the Original Report, on September 26, 2024, the Board of Directors of Trinseo PLC (the “Company”) approved a restructuring plan (the “2024 Restructuring Plan”) designed to reduce costs by streamlining commercial and operational activities and to further improve profitability and better position the Company for longer term growth and cash flow generation. The 2024 Restructuring Plan included: (i) combining the management of its Engineered Materials, Plastics Solutions and Polystyrene businesses, effective October 1, 2024, (ii) a reduction in workforce of supporting functions and (iii) exit of virgin polycarbonate production at its Stade, Germany production facility.
On November 13, 2024, the Company announced it entered into agreements to supply a polycarbonate technology license and proprietary polycarbonate production equipment in Stade, Germany to an affiliate of Deepak Nitrite Limited (Deepak) for use in India. In connection with this sale of polycarbonate manufacturing assets, the Company has decided to decommission the Stade, Germany polycarbonate plant (the “Stade Shutdown”) and expects to incur certain restructuring and other charges.
In connection with the Stade Shutdown and the 2024 Restructuring Plan, the Company expects to record total pre-tax restructuring charges of $76 million to $97 million, principally comprised of approximately $21 million to $26 million related to decommissioning and demolition costs, approximately $27 million to $31 million of contract terminations and other costs, and approximately $25 million to $26 million related to severance and related benefit costs. Additionally, asset-related charges of approximately $3 million to $14 million will also be incurred as determined by the outcome of the Deepak transaction. Actions are expected to be substantially completed by the end of 2027. The anticipated future total cash payments associated with the 2024 Restructuring Plan and Stade Shutdown are now expected to be approximately $69 million to $79 million with substantially all payments to be made by the end of 2027.
Cautionary Note on Forward-Looking Statements
This Current Report may contain forward-looking statements including, without limitation, statements concerning plans, objectives, goals, projections, forecasts, strategies, future events or performance, and underlying assumptions and other statements, which are not statements of historical facts or guarantees or assurances of future performance. Forward-looking statements may be identified by the use of words like “expect,” “anticipate,” “believe,” “intend,” “forecast,” “outlook,” “will,” “may,” “might,” “see,” “tend,” “assume,” “potential,” “likely,” “target,” “plan,” “contemplate,” “seek,” “attempt,” “should,” “could,” “would” or expressions of similar meaning. Forward-looking statements reflect management’s evaluation of information currently available and are based on the Company’s current expectations and assumptions regarding its business, the economy, its current indebtedness, accessibility of debt markets, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Factors that might cause future results to differ from those expressed by the forward-looking statements include, but are not limited to, our ability to complete the sale of polycarbonate production equipment from our Stade, Germany plant; our ability to successfully implement proposed restructuring initiatives and to successfully generate cost savings and increase profitability through such initiatives; our ability to successfully execute our business and transformation strategy; increased costs or disruption in the supply of raw materials; deterioration of our credit profile limiting our access to commercial credit; increased energy costs; compliance with laws and regulations impacting our business; any disruptions in production at our chemical manufacturing facilities, including those resulting from accidental spills or discharges; conditions in the global economy and capital markets; our current and future levels of indebtedness and ability to service our debt; our ability to meet the covenants under our existing indebtedness; our ability to generate cash flows from operations; and those discussed in our