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Strategies & Market Trends : Sharck Soup -- Ignore unavailable to you. Want to Upgrade?

To: besttrader who wrote (28697)	6/19/2001 6:00:54 PM
From: canmar	Read Replies (1) \| Respond to of 37746

THIS BODES VERY BADLY FOR THE ECONOMY: THESE GUYS ARE AT THE VERY BASE OF THE SUPPLY CHAIN, SO WHEN THEY DRASTICALLY REDUCE THEIR OUTLOOK, WE'RE IN BIG BIG TROUBLE. FOR: NOVA CHEMICALS CORPORATION TSE, NYSE SYMBOL: NCX JUNE 19, 2001 - 16:02 EDT NOVA Chemicals' Announces New, Flexible Call Rights on its Preferred Shares and Advises Reduced Expectations for Second Quarter Earnings PITTSBURGH, PENNSYLVANIA--NOVA Chemicals Corporation (NYSE:NCX)(TSE:NCX) announced today a transaction that will give NOVA Chemicals new, flexible call rights on its outstanding retractable preferred shares. The company also announced that second quarter earnings will be lower than expected. Preferred Shares Transaction NOVA Chemicals has completed a transaction among a subsidiary of the Bank of Nova Scotia, a subsidiary of NOVA Chemicals and two financial institutions resulting in these institutions purchasing preferred shares of the NOVA Chemicals subsidiary from a subsidiary of Huntsman Corporation. "This transaction gives NOVA Chemicals subsidiary, in effect, the right to call the preferred shares prior to any conversion into NOVA Chemicals common shares. The carrying costs associated with these instruments is approximately six-percent per annum after tax over the two-year term," explained Jeffrey M. Lipton, President and CEO of NOVA Chemicals. The NOVA Chemicals subsidiary originally issued $198 million (US) of preferred shares to Huntsman on December 31, 1998, as partial consideration for the styrenics assets acquired from Huntsman. The preferred shares are convertible into maximum of 8.5 million common shares of NOVA Chemicals on or after April 1, 2001. As part of the transaction announced today, certain changes were made to the terms of the preferred shares and to the stockholder agreement originally executed with Huntsman. The market-based exchange rate at which the preferred shares may be converted into NOVA Chemicals common shares (and, accordingly, the effective price at which the common shares would be issued) will now be fixed on April 1, 2003. If the holders would be entitled, based on the market-based exchange rate, to receive more than the maximum 8.5 million common shares, they would receive the difference in NOVA Chemicals preferred shares. In addition, the transfer, control restrictions and standstill arrangements contained in the stockholder agreement were replaced with a provision giving NOVA Chemicals the option to call the shares on or after December 15, 2001, and, under certain circumstances, prior to that date for a net cost to NOVA Chemicals of $191 million (US). Second Quarter Results In its first quarter earnings release, NOVA Chemicals stated that it expected results for the second quarter of 2001 to show improvement over the loss before unusual items of $0.12 per share reported in the first quarter. Our outlook has changed, and we expect earnings to decline to a loss of $0.25-to-$0.30 per share in the second quarter. Although our olefins/polyolefins business is showing the expected improvement, our styrenics business is weaker than the first quarter due to poor demand and lower margins. NOVA Chemicals' equity investment in Methanex is also expected to yield lower earnings. Second quarter results will be released on Wednesday, July 25, 2001 and a conference call will be held at 1 p.m. EDT on the same day. NOVA Chemicals is a focused commodity chemical company, producing styrenics and olefins/polyolefins at 18 locations in the United States, Canada, France, the Netherlands and the United Kingdom. NOVA Chemicals Corporation also owns 29 percent of Methanex Corporation, the world's largest and lowest cost producer of methanol. NOVA Chemicals Corporation shares trade on the Toronto and New York Stock exchanges under the trading symbol NCX. Visit NOVA Chemicals on the Internet at www.novachem.com.