Bankrupt Chemtura Seeks US $400 Million Loan
20 March 2009 Bloomberg.com reports that Connecticut, US-based Chemtura Corp., which has facilities in more than 40 countries, says it has only US $6 million cash on hand and needs to borrow $400 million to keep operating during its reorganization. In bankruptcy documents filed March 18, Chemtura cites weak sales for resins, electronics, and construction materials. The documents also list assets of $3.06 billion and debt of $2.6 billion.
The loan sought is a debtor-in-possession loan to fund operations, which allows some lenders to roll prebankruptcy debt into the new loan, which will account for about $86.5 million of the $400 million total. The loan will have a one-year term from its effective date, or the effective date of a reorganization plan, with a 4% annual interest rate or the fluctuating rate announced publicly by Citibank, whichever is higher. Another $8 million will go to attorneys and other professional fees. Chemtura said the loan terms were all it could get in difficult credit markets.
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