(Reuters) – Plastics processing and industrial fluids company, Milacron Inc (MZIA.PK), filed for Chapter 11 protection in a U.S bankruptcy court and agreed to sell its assets to its creditors.
Avenue Capital Group and DDJ Capital Management LLC will provide $80 million debtor in possession (DIP) term loan facility and purchase substantially all of Milacron’s assets, the company said in a statement.
Both Avenue and certain funds of DDJ Capital hold about 78 percent of the company’s 11.5 percent senior notes, Milacron said.
Milacron has also received a $55 million DIP revolving credit facility from General Electric Capital Corp (GE.N)in addition to the facility with Avenue Capital and DDJ.
The financing is subject to court approval.
Milacron added that Avenue Capital and DDJ will repay the full DIP facilities in exchange for the assets and provide “additional consideration” noteholders who do not participate in the acquisition.
Details on the possible payments to other noteholders were not immediately available.
Milacron said the ongoing credit crisis and deteriorating global economy had slashed demand for the company’s products, forcing it to file for bankruptcy protection.
“The filings include Milacron’s Canadian and U.S. operations only and should not affect the company’s European, Asian or any other non-North American operations,” it said.
In documents filed with the court, Milacron listed assets and liabilities in the range of $500 million to $1 billion.
The case is In re: Milacron Inc, Case No 09-11235 U.S. Bankruptcy Court, Southern District of Ohio. (Reporting by Santosh Nadgir in Bangalore, Editing by Dinesh Nair)