18 March 2009 23:42 [Source: ICIS news]
HOUSTON (ICIS news)--The US operations of Chemtura filed for bankruptcy protection, as collapsed demand choked off its liquidity, the company said on Wednesday.
"Like other companies in our industry and around the world, Chemtura's order volumes have declined markedly in recent months due to the impact of the global economic recession on our customers and the industries they serve," according to a statement by Craig Rogerson, CEO.
"This has led to a significant decrease in our liquidity and cash flow," he said.
Chemtura's foreign subsidiaries were not included in the filing, the company said.
Chemtura listed assets of $3.06bn (€2.36bn) and debts of $2.60bn. It has up to 50,000 creditors, according to court documents.
In addition, Chemtura said it has received a commitment for up to $400m in bankruptcy financing - also known as debtor-in-possession (DIP) financing. Companies use DIP financing to fund day-to-day operations while they reorganise under bankruptcy protection.
Until recently, Chemtura had expected a different outcome. In an interview with ICIS, Rogerson said the company was hoping to announce a $700m asset sale by the end of March.
With the proceeds from the sale, Chemtura would pay down $374m in debt and use the extra money to address any liquidity concerns, Rogerson said.
However, Chemtura did not have much time to arrange such a sale, as it was operating under a credit waiver.
With the waiver set to expire, bankruptcy was the company's best course, Rogerson said in a statement.
($1 = €0.77)
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