SINGAPORE (ICIS news)--US pigment producer Tronox on Monday filed for Chapter 11 bankruptcy protection for its US operations, the second chemical producer this month to seek cover against creditors amid the credit squeeze and sharp downturn in the global economy.
"After careful evaluation of all strategic alternatives, we have concluded that a Chapter 11 filing is the best way to address the company's debt, in particular its legacy liabilities," said Dennis Wanlass, Tronox chairman and CEO, in a statement.
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The amount of Tronox's “legacy liabilities”, which include environmental remediation and litigation costs incurred when it was spun off in 2006 by Kerr-McGee Corp, were not disclosed.
Tronox said it had secured a commitment for up to $125m in new debtor-in-possession (DIP) financing from its existing group of creditors, led by Credit Suisse, to ensure continued supply of goods and services to its customers.
“The DIP financing provides Tronox with ample liquidity to continue operations as usual during the restructuring process. The company will use the financing to pay vendors for all goods and services provided after the filing date,” it said.
The company had sounded off late last year that it may seek bankruptcy protection as market conditions deteriorated and its losses mounted.
"We want to assure customers, suppliers and employees that our operations are continuing without interruption, and during the restructuring period," Wanlass said.
LyondellBasell took the same move on January 6 to prevent liquidation. Its Lyondell Chemical unit has debts totalling $19bn.
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