In January, Union Carbide, facing a hostile takeover threat from GAF, borrowed heavily to repurchase 116 million shares of its own stock and announced the proposed sale of such well-known consumer lines as Prestone antifreeze, Glad plastic bags and Eveready batteries.
After the repurchase, Union Carbide's long-term debt was $4.1 billion, or nearly half of its total net worth. At the time, Alec Flamm, then Union Carbide's president, acknowledged that its heavy debt would force the company to "operate very carefully and with an eye on cash." Monday's announcement means that debt will be reduced to a more manageable $2 billion by mid-1987.
Since December, 1984, when a plant owned by a subsidiary in Bhopal, India, emitted a cloud of poison gas that killed nearly 2,000 persons and injured hundreds of thousands more, Union Carbide has struggled to overcome a series of financial, operational and reputational ailments. The company lost $582 million in 1985, largely from the cost of its defense against GAF and a $100-million reserve for the settlement of claims from Bhopal victims.