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By Phil Wahba
NEW YORK, March 18 (Reuters) - The U.S. operations of Chemtura Corp (CEM.N), a Connecticut-based maker of specialty chemicals, filed for Chapter 11 bankruptcy protection Wednesday, citing a “significant decrease in our liquidity and cash flow” caused by sharp declines in order volumes.
Chemtura’s non-U.S. subsidiaries were not included in the filing, and the company said in a statement it expects its U.S. and global operations to continue without interruption.
Chemtura’s bankruptcy filing includes 26 U.S. affiliates.
Chemtura listed assets of $3.06 billion and debts of $2.6 billion as of Dec. 31, 2008, according to documents filed in the U.S. Bankruptcy Court in the Southern District of New York in Manhattan.
Chemtura said it had a commitment for a $400 million debtor-in-possession bankruptcy loan from Citibank N.A. (C.N), subject to court approval, and said it expects to continue to meet its obligations to employees, customers and suppliers during its reorganization.
Hit by reduced demand, the company has taken various steps to control costs such as suspending its dividend, cutting jobs and slashing payrolls.
Chemtura’s Chief Executive Craig Rogerson in a statement faulted the global recession for the company’s falling orders.
“Despite our efforts to increase liquidity, including through the potential sale of a business, our reduced liquidity position, combined with the anticipated expiration of our bank waiver, led us to determine that a court-supervised restructuring was the best course of action,” Rogerson said.
In late February, Chemtura warned that it may not be in compliance with its financial covenants after a 90-day waiver period it entered into with its lenders on Dec. 30, 2008, ends, sending its bonds plunging.
Among Chemtura’s largest shareholders are FMR LLC, which the company estimated owns 9.95 percent of voting shares, and ICC Capital Management, which owns 7.7 percent, according to court documents.
The New York Stock Exchange halted trading in Chemtura’s stock Wednesday morning.
The case is In re: Chemtura Corporation, U.S. Bankruptcy Court, Southern District of New York, No. 09-11233. (Editing by Christian Wiessner)