By Patrick Fitzgerald and Emily Glazer
Momentive Performance Materials Inc., a silicone and quartz
producer owned by Apollo Global Management LLC, filed for Chapter
11 bankruptcy Sunday on the eve of a $60 million interest payment
it couldn't afford to make.
The Chapter 11 filing in U.S. Bankruptcy Court in White Plains,
N.Y., comes after the company had been in negotiations with
creditors about restructuring its unmanageable debt load.
Chief Executive Craig O. Morrison said in a statement Sunday
night that the company's "prenegotiated" plan with key creditors
will allow it to slash more than $3 billion in debt off the
company's books.
Earlier this month, Momentive said it was in active discussions
with creditors about restructuring its debt.
In court filings, Momentive listed four separate groups of
bondholders owed about $2.5 billion as its largest unsecured
creditors. Among those creditors are Oaktree Capital Management
LLC, GSO Capital Partners and Third Avenue Management.
Apollo's $3.8 billion buyout of New York-based Momentive in 2006
saddled the company with billions of dollars in debt ahead of a
global financial crisis and subsequent recession.
Apollo, which bought Momentive from General Electric Co., is
planning to retain a stake in the company, according to people
familiar with the matter.
Momentive produces silicones, which are often used in coatings
and adhesive for products including televisions, computer screens
and hand-held devices.
The company intends to remain open during its restructuring and
has lined up $570 million in bankruptcy financing from J.P. Morgan
Securities LLC to pay its suppliers and employees during the
bankruptcy case.
Momentive's Chapter 11 restructuring, which doesn't include
Momentive Specialty Chemicals Inc., is being handled by the law
firm of Willkie Farr & Gallagher LLP. The company's
restructuring adviser is AlixPartners and its investment bank is
Moelis &Co.
Write to Patrick Fitzgerald at patrick.fitzgerald@wsj.com and
Emily Glazer at emily.glazer@wsj.com
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