In the wake of its bankruptcy filing, Momentive Performance Materials Inc. has announced it has entered into a Restructuring Support Agreement with key stakeholders.

The restructuring plan will strengthen the company’s financial position by reducing long-term debt and enhancing liquidity. The plan provides $600 million in equity to the company, along with commitments of $1.3 billion of exit financing. The Restructuring Support Agreement has been supported by 85 percent of the company’s second lien note holders. Momentive Performance Materials, a global leader in the development and manufacturing of silicones and products derived from quartz and specialty ceramics, and its U.S. subsidiaries pre-negotiated the plan and it was implemented on April 13, when they filed to reorganize their debts under Chapter 11 of the U.S. Bankruptcy Code.

All of Momentive Performance Materials silicones and quartz businesses will continue to operate in their ordinary course throughout the Chapter 11 process according to Craig O. Morrison, chairman, president, and CEO of Momentive Performance Materials.

Morrison said that throughout the restructuring process they intend to continue providing customers with the high-quality products and service they expect from Momentive Performance Materials. He also said they have innovative technologies and product development capabilities, blue-chip customers, and a worldwide workforce which supports them as they move forward.

Locally, Momentive Performance Materials’ Friendly plant is part of the plastics materials, synthetic resins, and nonvulcanizable elastomers industry. They currently employ approximately 500 employees and have annual sales of over $1 million. They are the second largest employer in the county. Tyler County and the local school system count heavily on the tax dollars generated from the operation of MPM’S plant located in the southern end of the county. It is estimated that for every job at MPM’S Friendly plant another three jobs are created in related fields. Annual salaries and benefit packages at the Friendly plant amount to approximately $37.5 million.

Following the announcement of the Restructuring Agreement, the U.S. Bankruptcy Court for the Southern District of New York issued a variety of “first day ” orders requested by the company. The first day orders will help Momentive Performance Materials to continue operating its business in its normal course as it executes its balance sheet. The court order allows MPM access to $430 million of its $570 million in debtor-in-possession financing secured by J.P. Morgan Securities LLC.

This new financing, combined with cash generated by the company’s ongoing operations, will help Momentive Performance Materials meet its operational and restructuring needs. MPM will also have over $300 million in available liquidity. The court has also approved MPM’S requests to continue paying employee wages and benefits and honoring customer programs.

“The court’s approval of our first-day motions is a positive step forward in our efforts to strengthen MPM’S financial condition,” said MPM’S CEO Craig O. Morrison.

The bankruptcy decision came around the same time that Momentive Performance Materials was supposed to make a $60 million interest payment on loans they took out back in 2006. Momentive was then a part of General Electric Company’s advanced materials unit when Apollo Global Management LLC bought Momentive in a deal worth $3.8 billion. The global recession in 2008 followed and changes in the silicone industry affected Momentive’s debt payment capacity. The industry sector in which Momentive operates has become crowded and profit margins have shrunk. Market shares have also diminished rapidly. MPM reported a net loss of $360 million in 2012 and its credit rating suffered another big blow in Feb, 2013, when Standard and Poor’s rated it with the fourth lowest grade.

Momentive Performance Materials’ recovery plan is to continue operating as a debtor-in-possession according to U.S. Bankruptcy laws. It will also continue to operate and hold possession of its properties. This is expected to help Momentive Performance Materials perform the necessary restructuring.