Silicones and Quartz Producer Momentive Performance Materials Inc. Prepares to Emerge from Chapter 11
WATERFORD, N.Y. – August 27, 2014 – Momentive Performance Materials Inc. (“MPM” or “the Company”), a global leader in the development and manufacture of silicones and products derived from quartz and specialty ceramics, today announced that the U.S. Bankruptcy Court for the Southern District of New York indicated at a hearing on August 26, 2014 that it will enter an order confirming the Company’s restructuring plan once certain modifications have been made to the plan. MPM expects to complete the modifications shortly and to formally emerge from Chapter 11 within the next few weeks.
“Now that the court has indicated that it will confirm our plan, the path is clear for MPM to emerge from Chapter 11 as a stronger and more competitive company,” said Craig O. Morrison, Chairman, President and CEO of MPM. “Our restructured balance sheet better aligns MPM with current industry dynamics and will provide us with additional cash flow that, among other things, can be invested in growth opportunities, research and development and technology enhancements.”
The key terms of the plan include a $600 million rights offering, which will provide a significant equity infusion to the Company and 100% recovery to trade creditors and other general unsecured creditors. Upon emergence, MPM will have eliminated approximately $3 billion of debt from its balance sheet, and will have liquidity of approximately $425 million and net debt of approximately $1.2 billion.
Mr. Morrison continued, “I want to thank our lenders, including the financial institutions that have provided us with debtor-in-possession and exit financing, for their invaluable support of our company. I also want to express my gratitude to our customers, suppliers and employees for their unwavering commitment to MPM, which has allowed us to operate without interruption throughout this process and to fulfill our obligations worldwide. MPM has a bright future ahead of it, and we look forward to sharing our future success with all of our stakeholders.”
Additional information is available at www.momentive.com/mpmrestructuring. Suppliers with questions can contact a dedicated vendor hotline, toll-free at 844-812-8197 or locally at 614-225-4200, or via email at firstname.lastname@example.org. Court filings and information about the claims process are available on a dedicated website administered by MPM’s claims agent, Kurtzman Carson Consultants LLC, at www.kccllc.net/mpm, or by calling 888-249-2792 (310-751-2607 for international calls).
Willkie Farr & Gallagher LLP is serving as legal counsel, Moelis & Company is serving as financial advisor, and AlixPartners, LLP is serving as restructuring advisor to MPM.
About Momentive Performance Materials Inc.
Momentive Performance Materials Inc. is a global leader in silicones and advanced materials, with a 75-year heritage of being first to market with performance applications for major industries that support and improve everyday life. The Company delivers science-based solutions, by linking custom technology platforms to opportunities for customers. Momentive Performance Materials Inc. is an indirect wholly owned subsidiary of Momentive Performance Materials Holdings LLC.
Forward-Looking and Cautionary Statements
Certain statements in this press release are forward-looking statements within the meaning of and made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In addition, our management may from time to time make oral forward-looking statements. All statements, other than statements of historical facts, are forward-looking statements. Forward-looking statements may be identified by the words “believe,” “expect,” “anticipate,” “project,” “plan,” “estimate,” “may,” “will,” “could,” “should,” “seek” or “intend” and similar expressions. Forward-looking statements reflect our current expectations and assumptions regarding our business, the economy and other future events and conditions and are based on currently available financial, economic and competitive data and our current business plans. Actual results could vary materially depending on risks and uncertainties that may affect our operations, markets, services, prices and other factors as discussed in the Risk Factors section of our filings with the Securities and Exchange Commission (the “SEC”) and those described in filings made by the Company with the U.S. Bankruptcy Court for the Southern District of New York. While we believe our assumptions are reasonable, we caution you against relying on any forward-looking statements as it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: the ability of the Company to continue as a going concern, the Company’s ability to obtain Bankruptcy Court approval with respect to motions in the Chapter 11 cases, the ability of the Company and its subsidiaries to successfully effectuate a plan of reorganization with respect to Chapter 11 cases, the Company’s ability to negotiate definitive agreements and obtain financing, the potential adverse effects of Chapter 11 proceedings on the Company’s liquidity, results of operations, brand or business prospects, the ability to execute the Company’s businesses and restructuring plan, increased legal costs related to the Bankruptcy filing and other potential litigation, the Company’s ability to maintain contracts that are critical to its operations and to maintain normal terms with customers, suppliers and service providers, the Company’s ability to maintain product reliability and quality and to retain key executives, managers and employees, and the ability of the Company’s non-U.S. subsidiaries to continue to operate their businesses in the normal course, a weakening of global economic and financial conditions, interruptions in the supply of or increased cost of raw materials, changes in governmental regulations and related compliance and litigation costs, difficulties with the realization of cost savings in connection with our strategic initiatives, including transactions with our affiliate, Momentive Specialty Chemicals Inc., pricing actions by our competitors that could affect our operating margins, and other unknown factors. All forward-looking statements are expressly qualified in their entirety by this cautionary notice. The forward-looking statements made by us speak only as of the date on which they are made. Factors or events that could cause our actual results to differ may emerge from time to time. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.
Investors and Media:
Michael Freitag or Nick Lamplough
Joele Frank, Wilkinson Brimmer Katcher