UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 2.05. | Costs Associated with Exit or Disposal Activities. |
On July 2, 2024, management of Westlake Corporation (the “Company”) approved a plan to temporarily cease operations of (“mothball”) the allyl chloride (AC) and epichlorohydrin (ECH) units at the Company’s site in Pernis, the Netherlands (collectively, the “Units”) subject to completion of local consultation obligations. The Company will continue to operate the liquid epoxy resin (LER) and bisphenol A (BPA) units at the Pernis facility.
On July 29, 2024, the Company notified the affected employees at the Units that management approved the plan to mothball the Units. The Units are expected to temporarily cease operations in 2025. The Company expects to incur total pre-tax costs of approximately EUR 80 million related to the mothballing of the Units. The mothballing of the Units is expected to result in a workforce reduction of approximately 30 employees. The expected costs related to mothballing the Units consist of employee severance and separation costs of approximately EUR 5 million and charges for environmental remediation and other plant mothballing costs of approximately EUR 75 million.
The Company expects to record substantially all of these costs during fiscal period Q3 2024 with cash outflows expected to occur over several years starting in 2025. Once completed, the Company expects these actions will materially improve the financial performance of the Pernis, Netherlands site while enabling the Company to continue to serve its customers with BPA, LER, solutions, and epoxy specialty resins as it does now prior to taking these actions.
Forward-Looking Statements
The statements in this Current Report on Form 8-K that are not historical facts, including statements regarding the estimated pre-tax costs relating to the timing of the mothballing of the Units and expected cash outflows, and the improvement of the financial performance of the Pernis, Netherlands site as a result of the mothballing of the Units, are forward-looking statements within the meaning of the U.S. securities laws. These forward-looking statements are subject to significant risks and uncertainties, many of which are beyond the Company’s control. Actual results could differ materially, based on factors including, but not limited to, the ultimate cost of the mothballing of the Units and the financial performance of the Pernis, Netherlands site following the mothballing of the Units; and other risks and uncertainties. For more detailed information about the factors that could cause actual results to differ materially, please refer to Westlake’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on February 22, 2024, and Westlake’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, which was filed with the SEC on May 2, 2024.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| WESTLAKE CORPORATION | ||||||
| Date: July 29, 2024 | By: | /s/ L. Benjamin Ederington | ||||
| L. Benjamin Ederington | ||||||
| Executive Vice President, Performance and Essential Materials, General Counsel and Chief Administrative Officer | ||||||