Momentive Performance Materials Inc., a maker of silicones and quartz products owned by Leon Black’s Apollo Global Management LLC (APO:US), won permission to borrow $570 million to fund operations in bankruptcy over objections from some creditors.
U.S. Bankruptcy Judge Robert Drain gave the company final approval to take out the loan today in White Plains, New York. Momentive said in court papers that the loan was the best it could obtain after a “highly competitive, multi-week process” to address its deteriorating finances.
The money is needed to “permit the orderly continuation” of Momentive’s business, make payroll and cover other essential costs, Drain said in today’s order. He had already granted interim approval to take out part of the loan, which is administered by JPMorgan Chase & Co. (JPM:US)
The company’s official creditors’ committee had objected to the loan, saying in court papers that it was “laden with provisions that would provide significant legal and economic advantages” to New York-based Apollo at their expense.
Momentive’s restructuring plan has already been filed and has backing from 95 percent of second-lien noteholders, according to court papers.
Momentive, based in Waterford, New York, listed $2.69 billion of assets and $4.17 billion of debt in its Chapter 11 filing in April. The company hasn’t posted an annual profit since Apollo bought it for $3.8 billion in 2006, according to data compiled by Bloomberg.
The case is In re Momentive Performance Materials Inc., 14-bk-22509, U.S. Bankruptcy Court, Southern District of New York (White Plains).
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