Momentive Performance Materials filed its proposed reorganization plan and disclosure statement yesterday with the bankruptcy court in White Plains, N.Y.
The bankruptcy court scheduled a hearing on the adequacy of the disclosure statement for June 19, according to an entry on the court docket.
Under the plan, the company will repay both its first-lien notes ($1.1 billion of 8.875% first-priority senior secured notes due 2020) and its 1.5-lien notes ($250 million of 10% senior secured notes due 2020) in full, in cash, including accrued and unpaid interest, but excluding any make-whole amounts.
Second-lien lenders ($1.161 billion of 9% second-priority springing lien notes due 2021 and €133 million 9.5% second-priority springing lien notes due 2021), are to receive the equity in the reorganized company, along with participation rights in a $600 million rights offering at a price per share determined by using the pro forma capital structure and an enterprise value of $2.2 billion, applying a 15% discount to the equity value.
The disclosure statement did not provide a valuation for the company or, as a result, a recovery value for the second-lien claims.
Holders of the company’s holding company PIK notes will receive remaining cash at the holding company, after payment of administrative expenses, but again, the disclosure statement does not provide a value for this recovery. The company’s senior subordinated creditors, meanwhile, will not see any recovery, and existing equity, needless to say, is to be cancelled.
The plan contemplates up to $1.27 billion in exit financing, comprised of a $270 million ABL and up to $1 billion in a new exit term loan, to be used to repay outstanding amounts under the company’s DIP and to fund distributions under the plan. – Alan Zimmerman