WASHINGTON—Momentive Performance Materials Inc. may file for Chapter 11 bankruptcy protection sometime in April, according to the company's latest filing with the Securities and Exchange Commission.
In the Form 12b-25 filed with the SEC April 1, Momentive said it could not file its 10-K annual report as scheduled for the period ending Dec. 31, 2013, because management needed “additional time to analyze and finalize the Company's financial statements.”
“A filing under Chapter 11 of the U.S. Bankruptcy Code may provide the most expeditious manner in which to effect a plan of reorganization,” Momentive said in the April 1 filing. “However, there can be no assurance that an agreement can be reached with the company's stakeholders, or that any transactions with the company's stakeholders will be consummated.”
Momentive's survival over the next year is seriously in doubt, although the company is in compliance with all the indentures governing its outstanding notes and credit agreements, it said.
Purchased by Apollo Global Management in 2006 in a $3.8 billion leveraged buyout, Momentive—which is the former General Electric Silicones business—found itself saddled with extra debt just before the 2008 recession, which created an oversupply in the silicone markets Momentive supplies.
Currently Momentive, its holding company and its creditors are negotiating to restructure the company's $4.4 billion debt.
According to the SEC filing, Momentive expects to report a net loss of $465 million in 2013 on sales of just less than $2.4 billion, compared with a $365 million loss in 2012 on sales of $2.36 billion.
Momentive's affiliate, Momentive Specialty Chemicals Inc., is solvent and won't be part of the bankruptcy proceeding. Momentive Specialty Chemicals is the former Hexion Specialty Chemicals Inc.