US specialty chemicals producer Chemtura (Middlebury, Connecticut / USA; www.chemtura.com) has joined the growing list of companies filing for Chapter 11 protection from creditors. Saying that “order volumes have declined markedly, due to the impact of the global economic recession on our customers and the industries they serve,” the plastic additives and flame retardants specialist filed the voluntary petition on behalf of the parent company and 26 US affiliates. Overseas operations are unaffected, and Chemtura said its US business, too, is expected to “continue without interruption during the restructuring process.”

Craig A. Robertson, who took over from Robert Wood as president and CEO at the beginning of 2009, said the order decline had led to a “significant decrease” in liquidity and cash flow and that efforts to increase liquidity through an asset sale had failed. This, combined with the “anticipated expiration of our bank waiver,” indicated that a court-supervised reconstruction was “the best course of action,” he added.

In conjunction with the filing, Chemtura is tapping the debtor-in-possession (DIP) instrument also employed by a number of other companies in Chapter 11, including LyondellBasell, Milacron, Tronox and Cadence Innovation. The additives group will receive USD 400m in DIP financing through Citibank as administrative agent. The capital injection will support the business during restructurisation, allowing it to meet obligations to employees, customers and suppliers.

Chemtura was created in 2005 through the merger of Crompton and Great Lakes – see Plasteurope.com of 15.03.2005. It is a leading global manufacturer of additives such as stabilisers, plasticisers, antioxidants, flame retardants, blowing agents, catalysts and modifiers. For 2008 the group reported sales of USD 3.5 bn and an operating loss of USD 929m. The net loss exceeded USD 1 bn. Its Chapter 11 petition lists USD 3.1 bn in assets and USD 2.6 bn in liabilities. The list of Chemtura’s 50 largest creditors with trade claims contains a number of well-known international chemical industry names, including Lyondell Chemical – which is owed USD 2.7 bn.