ERJ staff report (TP)
Waterford, NY – Momentive Performance Materials (MPM), the US silicones producer, announced on 14 April that the US Bankruptcy Court for the Southern District of New York has issued a variety of “first-day” orders requested by the company.
The First Day Orders will help MPM continue operating its business in normal course as it executes its balance sheet restructuring.
Among other things, the Court has provided interim authorisation for MPM to access up to $430m (€311.6m) of its $570m (€413.1m) in debtor-in-possession financing led by JP Morgan Securities LLC as lead arranger.
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; and on a pro forma basis for the approvals, MPM will have over $300m (€217.4m) in available liquidity. The Court also approved MPM’s requests to continue paying employee wages and benefits and honouring customer programs.
“The Court’s approval of our first-day motions is a positive step forward in our efforts to strengthen MPM’s financial condition,” said Craig O. Morrison, Chairman, President and CEO of MPM. “With these approvals, MPM can continue operating and funding its business operations in the normal course.”
As previously announced, on 13 April, MPM reached an agreement with certain of its key stakeholders regarding the terms of a balance sheet restructuring plan that will strengthen its financial position by eliminating more than $3bn (€2.17bn) of debt from MPM’s balance sheet and enhancing liquidity.
To implement this “pre-negotiated” plan, MPM and its US subsidiaries voluntarily filed to reorganise under Chapter 11 of the US Bankruptcy Code. MPM’s operations outside the US are not included in the Chapter 11 proceedings. The restructuring relates solely to MPM and not to Momentive Specialty Chemicals Inc. (MSC), which has a fully independent debt capital structure and a separate and strong balance sheet.
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Press release from MPM