Hexion gets court approval to assume restructuring support agreement

By Caroline Salls

Pittsburgh, May 15 – Hexion Inc. received court approval to assume a restructuring support agreement reached with the majority of holders of its notes, according to an order filed Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the support agreement sets the terms of a consensual financial deleveraging plan that will strengthen the company’s financial position and accelerate future growth.

Under the restructuring support agreement, creditors representing all tranches of the company’s notes agreed to support confirmation of a pre-packaged plan of reorganization.

Hexion said the plan will provide for a significant deleveraging of its capital structure by more than $2 billion, an infusion of $300 million in equity capital through a fully backstopped rights offering and a committed exit facility of more than $1.6 billion.

The company’s trade creditors, employees and other general unsecured creditors will be paid in full.

Specifically, the company said holders of first-lien notes will receive $1.45 billion in cash, less the sum of adequate protection payments reflecting interest on the notes, as well as 72.5% of the new Hexion common shares and rights offering proceeds.

Holders of 1.5-lien notes and unsecured notes will receive a share of 27.5% of the new common shares and rights offering proceeds.

Holders of the debtors’ outstanding common equity will receive no recovery.

Hexion is a Columbus, Ohio-based chemical company. The company filed bankruptcy on April 1 under Chapter 11 case number is 19-10684.

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