Pittsburgh, Penssylvania – Zinc oxide producer Zochem Inc. and its parent company, Horsehead Holding Corp., filed voluntary Chapter 11 petitions 2 Feb for protection under the US Bankruptcy Code.
The Pittsburgh-based Horsehead and three of its subsidiaries filed the petitions in the US Bankruptcy Court for the District of Delaware. Zochem is a Brampton, Ontario, producer of zinc oxide, which is used to aid vulcanisation in the production of tires and other rubber products.
Jim Hensler, Horsehead president and CEO, said the filing will allow the firm to restructure its balance sheet. “Filing for Chapter 11 protection is the best available option to preserve stakeholder value,” he said. “We intend to emerge with increased financial flexibility and a capital structure that will enable us to invest in our growing business.”
Horsehead in its filing listed liabilities of $544.7 million (€480 million) and total assets of $1 billion. It also applied for permission for debtor-in-possession financing as it continues to operate its businesses during the court proceedings. The firm had failed to pay a $1.9 million senior convertible note that had expired in January.
In a recent interview, Zochem said it reported 2014 pre-tax earnings of $13.6 million on sales of $145 million, It has capacity to produce 65,000 tonnes per year of zinc oxide and has fewer than 50 full-time employees.