June 2, 2009 (FinancialWire) — Solutia Inc. (NYSE: SOA) said it has completed the sale of its nylon business to an affiliate of SK Capital Partners II, L.P. for $50 million in cash.

Under the deal, Solutia also received a two percent equity stake in the new company formed to hold substantially all of the assets of the nylon business. In addition Solutia will receive $4 million in deferred cash payments to be paid in annual $1 million installments beginning in 2011.

SK Capital also has secured replacement of $25 million of letters of credit associated with the nylon business, which has resulted in increased availability for Solutia under its credit agreements.

The affiliate of SK Capital will assume substantially all of the liabilities of the nylon business, including employee and pension liabilities relating to the active employees of the business and environmental liabilities.

Solutia used the proceeds of the nylon sale to pay down debt under its asset-based revolving credit facility.

Jeffry N. Quinn, Solutia’s chairman, president, and CEO said, “This sale completes Solutia’s transformation into a pure-play performance materials and specialty chemicals company.”

St. Louis, Missouri-based Solutia’s products include Saflex interlayer for laminated glass, CPFilms aftermarket window films sold under the LLumar brand and others.

The company also makes the Flexsys line of chemicals for the rubber industry, Skydrol aviation hydraulic fluid and Therminol heat transfer fluid.

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