UPDATE 3-Champion seeks Chapter 11 for U.S. operations

* Files for bankruptcy under Chapter 11

* Says has assets of $576.5 mln, debts of $521.3 mln (Recasts; adds background from filing)

NEW YORK/BANGALORE Nov 16 (Reuters) - Champion Enterprises Inc CHB.N, a maker of factory-built homes and modular buildings, has filed for bankruptcy and hopes to sell its U.S. operations.

The company said it had obtained a $40 million debtor-in-possession credit facility from lenders, a portion of which would be used for operations outside the United States.

Champion said it had total assets of $576.5 million and total debts of $521.3 million, according to a petition filed Sunday with the U.S. Bankruptcy Court for the District of Delaware in Wilmington.

The petition covers the company and its U.S. units. Operations in the UK and Canada were not included.

Last month, the company signed a waiver agreement with its lenders, which agreed not to accelerate the maturity of loans outstanding under a credit agreement. [ID:nBNG33971]

Champion said it will undergo a court-supervised sale process in which its lenders may participate.

It said its investment banker has "already received initial indications of interest from a number of parties expressing a desire to participate in this sale process."

Champion said it had decided not to accept a third-party offer. The Troy, Michigan-based company had been in talks with a third party that expressed interest in an investment. [ID:nBNG429620]

Champion said daily operations would continue throughout the restructuring.

"Our balance sheet is the problem, not our operations," Chief Executive William Griffiths said. "The next step ... is to restructure our balance sheet and position our company to capitalize on the anticipated recovery in the residential and commercial construction markets."

Champion, founded in 1953, employs about 1,994 people in 22 manufacturing facilities across North America.

Shares of the company closed at 20 cents on Friday on the New York Stock Exchange.

The case is In re: Champion Enterprises Inc, U.S. Bankruptcy Court, District of Delaware, No 09-14019. (Reporting by Jui Chakravorty in New York, Supantha Mukherjee and Santosh Nadgir in Bangalore; Editing by Muralikumar Anantharaman and John Wallace)