Momentive Materials Files For Bankruptcy

Facing millions of dollars in debt payments it cannot continue to make, silicones maker Momentive Performance Materials has filed for reorganization in U.S. Bankruptcy Court in White Plains, N.Y. Creditors have already agreed on a reorganization plan that, according to CEO Craig Morrison, “will eliminate more than $3 billion of debt from Momentive’s balance sheet.” Momentive, which had a net loss of $464 million on sales of $2.4 billion in 2013, expects to emerge from bankruptcy at the end of the year. Much of Momentive’s debt dates back to 2006 when the private equity firm Apollo Global Management acquired the silicones business from General Electric for $3.2 billion. Slow silicone demand from key industries such as construction and electronics, exacerbated by poor growth in Asia, has hurt Momentive, says John P. Rogers, a Moody’s debt analyst.