WATERFORD, N.Y.—Silicone and quartz product manufacturer Momentive Performances Materials Inc. is proceeding with Chapter 11 reorganization plans after reaching agreement with some of its key stakeholders on a balance sheet restructuring plan.
No date has been set for a final vote on the plan.
The next major date in MPM's Chapter 11 proceedings is a June 16 creditors' meeting, according to an outside spokesman for the company. He described the meeting as a procedural event required by the Bankruptcy Code. Creditors are invited to the meeting to obtain information about the reorganization plan, but the meeting per se will have no direct impact on the plan itself, he said.
A creditor's committee has been formed since the Waterford-based company filed its restructuring plan April 13 with the U.S. Bankruptcy Court for the Southern District of New York in White Plains, according to the spokesman.
MPM executives are meeting with committee members and mailing the plan to creditors for a vote, he said.
“The company is moving along in a fairly expedited fashion, but there are no firm dates for final approval of the plan,” he said.
MPM, the former General Electric Silicones business, was acquired by Apollo Global Management in 2006 in a $3.8 billion leveraged buyout. In 2010, Apollo bought Hexion Specialty Chemicals and renamed it Momentive Specialty Chemicals Inc. Together the entities are known as Momentive Performance Materials Holdings L.L.C.
Momentive Specialty Chemicals has a fully independent debt capital structure from MPM and is not part of the Chapter 11 proceedings, according to a statement issued by MPM April 14.
MPM hasn't shown a profit since Apollo purchased it, according to a report from Bloomberg News. In its April 13 filing, the company listed $2.69 billion in assets and $4.17 billion in debts.
The key terms of the MPM restructuring agreement include a $600 million rights offering, which the company said will provide it with a significant infusion of equity, and secured commitments for $1.3 billion in exit financing.
On April 14, the bankruptcy court provided MPM with interim authorization to access up to $430 million of its $570 million in debtor-in-possession financing led by J.P. Morgan Securities L.L.C., MPM said.
“The new financing, combined with cash generated by the company's ongoing operations, will be available to MPM to meet its operational and restructuring needs,” the company said. With this financing, MPM has more than $300 million in available liquidity on a pro forma basis, it said.
MPM has set up a website, through www.momentive.com, to provide information to creditors, suppliers, customers, press and others regarding the reorganization plan. Court filings and information about the claims process can be found at www.kccllc.net/mpm, the dedicated website run by MPM's claims agent, Kurtzman Carson Consultants.