Chemtura and 26 U.S. affiliates filed a joint Chapter 11 reorganization plan and disclosure statement Thursday, key steps in exiting bankruptcy. Separately, the company has snagged $1.5 million in federal funds to support synthetic refrigerant lubricants development.
Middlebury, Conn.-headquartered Chemtura expects the bankruptcy court to schedule a hearing to consider approval of the disclosure statement, and stated it remains on track to emerge from bankruptcy in the coming months. There is no specific timetable for approval of the reorganization plan. There are a number of unpredictable contingencies that can occur between now and confirmation of the plan, so we had to leave it a little bit open ended, Chemtura spokesman John Gustavsen told Lube Report.
The filing of our plan is a significant milestone in the Chapter 11 process, demonstrating Chemturas progress toward emerging as a stronger, leaner global enterprise, said Craig Rogerson, Chemturas chairman, president and CEO. Rogerson noted the plan has the full support of its unsecured creditors committee and ad hoc committee of bondholders.
Chemtura and the affiliates filed for Chapter 11 bankruptcy protection in March 2009, citing major decreases in liquidity and cash flow due to a market decline in order volumes in the preceding months because of the global economic recession. The company recorded an operating loss of $737 million for 2008s fourth quarter and a $929 million loss for the year 2008. It posted sales of $2.5 billion in 2009.
According to Gustavsen, Chemtura formulated specific business plans for its seven businesses earlier this year. Those were not plans that just looked out to a horizon at the end of Chapter 11 but they look out five years, so we started to execute those right away, he pointed out. So depending on the business and the section of the plan, some capital expenditures may have been required to unfold that given part of a plan. Depending on the circumstances, we had to get Chapter 11 approval for certain cap ex expenditures. Were on parallel courses here – business plan execution, and Chapter 11 on the other.
In late 2008, the manufacturer began trimming its workforce by 500 professional and administrative staff worldwide, or about 10 percent of its workforce. In January 2009, it outlined plans to realign two business groups, Performance Products and Engineered Products, with its petroleum additives, lubricants and greases reporting under the former. According to the disclosure statement, the Performance Products group posted $999 million in net sales for 2009, a 31.8 percent decrease from net sales for 2008.
Chemtura’s operations outside the United States are not part of the Chapter 11 proceedings.
On Thursday, The U.S. Department of energy announced $76 million funding from the American Recovery and Reinvestment Act to support advanced energy-efficient building technology products. That includes almost $1.5 million to support Chemtura efforts to develop, test and bring to market new synthetic refrigerant lubricants.
The project will seek to reduce overall energy requirements for refrigeration and cooling systems by as much as 2 percent, based solely on using newly developed, highly compatible lubricants, the department said in a summary of the funded projects.