Celanese Corporation
02/29/2024 | Press release | Distributed by Public on 02/29/2024 15:58
Costs Associated with Exit/Disposal - Form 8-K
| Item 2.05 | Costs Associated with Exit or Disposal Activities. |
On February 29, 2024, Celanese Corporation ("Celanese" or the "Company") announced the intended closure of its facility in Mechelen, Belgium to help optimize the Company's production costs across its global network. Celanese's facility in Mechelen, Belgium is an Engineered Materials compounding site acquired as part of the Company's acquisition of the majority of the Mobility & Materials business of DuPont de Nemours, Inc. in November 2022. This proposed cessation is subject to a consultation process with the applicable works council and union representatives at the facility, which the Company intends to initiate on March 4, 2024. The Company intends to permanently cease all manufacturing operations by the end of September 2024, subject to the completion of such consultation process.
As a result of this intended closure, the Company expects to record expenses, excluding employee termination costs, of approximately $60-75 million, consisting primarily of approximately $40-50 million of non-cash accelerated depreciation of fixed asset costs and approximately $20-25 million of other facility-related shutdown cash costs, with such cash outflows expected to occur during fiscal 2024 and 2025.
In addition to these expenses, the Company expects to incur employee termination costs, which are subject to the above-referenced works council consultation. Until such consultation is concluded, the Company is unable to reasonably estimate the employee termination costs it will incur in connection with the intended actions. The Company will disclose the amount, type and timing of such costs promptly after they are determined.
The above charges are estimates; the actual charges may vary significantly based on various factors, including the outcome of the consultation process with the applicable works council and union representatives.
Forward-Looking Statements
The information set forth in this Current Report contains certain "forward-looking statements," which include information concerning the Company's plans, objectives, goals, expected future costs associated with the anticipated closure of the above-referenced facility in Mechelen, Belgium and other information that is not historical information. All forward-looking statements are based upon current expectations and beliefs and various assumptions. There can be no assurance that the Company will realize these expectations or that these beliefs will prove correct. There are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements contained herein. Numerous factors, many of which are beyond the Company's control could cause actual results to differ materially from those expressed as forward-looking statements. Certain of these risk factors are discussed under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 and other filings with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date it is made, and the Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date the statement is made.
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