Sector News

US Hexion files for bankruptcy protection

April 2, 2019
Chemical Value Chain

US-based Hexion filed for bankruptcy protection under chapter 11 on Monday after it reached a deal with most of its creditors, it said.

The company estimated that both its assets and liabilities are worth $1bn-10bn.

The creditors with the largest unsecured claims include Blue Cube Operations at $7.04m; Southern Chemical at $7.02m; Mitsubishi at $5.85m; OCI at $3.79m; Dystar at $3.61m; and Methanex at $3.55m. Financial institutions had larger claims that were partially secured.

All of Hexion’s global segments are continuing to operate normally, and the filing should not affect its operations outside of the US, the company said.

Hexion’s proposed restructuring support agreement (RSA) calls for the following:

– De-leveraging of over $2bn. This will cut down the company’s debt.

– A rights offering that should provide the company with $300m in equity capital.

– A committed exit facility worth more than $1.6bn.

– Full payment of Hexion’s trade creditors, employees and other general unsecured creditors.

The RSA still needs confirmation from the bankruptcy court. Hexion said the proposal will eliminate a significant part of the company’s debt while putting it in a better competitive positions.

Meanwhile, Hexion has received commitments for $700m in debtor-in-possession (DIP) financing, it said. Companies use DIP financing to help fund their operations while they are under bankruptcy protection.

“We believe that with a stronger balance sheet, Hexion will be better positioned to further invest in our specialty product portfolio and capitalise on positive industry growth trends and our market leading positions,” said CEO Craig Rogerson.

Hexion makes epoxy resins and other thermoset resins.

The company filed for bankruptcy protection in US Bankruptcy Court, Delaware District Court. The case number is 19-10684.

Source: ICIS News

Related News

February 20, 2020

Wacker to cut 1,000 jobs as part of new efficiency program

Chemical Value Chain

LinkedIn Twitter FacebookWacker Chemie announced today that it is embarking on a major restructuring program, dubbed Shape the Future, to increase competitiveness and profitability. Last month, the company announced the […]

February 20, 2020

China’s chemical sector faces slow post-holiday recovery on labor, logistics due to coronavirus

Chemical Value Chain

LinkedIn Twitter FacebookThe typical post–Lunar New Year holiday recovery in China’s petrochemical sector has been slowed by the logistics constraints and labor shortages stemming from the country’s extensive coronavirus (Covid-19) […]

February 19, 2020

Mondi appoints Andrew King as Group CEO

Chemical Value Chain

LinkedIn Twitter FacebookPackaging and paper group Mondi Plc. said Tuesday that Andrew King, Group Chief Financial Officer and a director of the company, will be appointed as Group Chief Executive […]