Columbus, Ohio-based Hexion Inc., a manufacturer of thermoset resins and speciality products, filed for Chapter 11 bankruptcy and entered into a restructuring agreement for all US subsidiaries and one non-operating entity in Nova Scotia.
Other operations outside the US aren't included in the voluntary petition filed 1 April at the US Bankruptcy Court in Wilmington, Delaware.
The restructuring plan calls for deleveraging Hexion's capital structure by more than $2bn (€1.8bn) billion, infusing $300m (€267m) in equity capital through a fully-backstopped rights offering, and fully paying creditors and employees, among other provisions.
About 1,300 of Hexion's 4,000 employees reportedly work in the US, making resins and products at 27 plants for the automotive, building and construction, oil and gas and wind energy markets. Last year the company also introduced a new line of chemicals to increase surface stickiness in adhesive formulations for tire and rubber applications.
Hexion filed for Chapter 11 just before $67m (€60m) in bondholder interest payments was to come due this month, according to the Wall Street Journal.
The court granted Hexion interim approval to access up to $600m (€534m) of its $700m (€623m) in debtor-in-possession financing to help meet operational and restructuring needs.
"We are pleased to have received approval of our first-day motions, which will allow us to continue executing our strategy and providing our customers with the high-quality products and service they expect," Craig Rogerson, Hexion's chairman, president and CEO, said in a news release.
"We now have the support of more than 75% of noteholders across our capital structure on a consensual financial deleveraging plan that will allow us to emerge on an accelerated timeline as a stronger, well-capitalized company. As we move through this process, we are committed to operating our business safely and efficiently while maintaining productive relationships with all of our business partners."
The company's major shareholder is Apollo Global Management LLC.