The judge overseeing chemical maker Hexion Inc.’s bankruptcy approved its $2 billion debt-cutting plan, turning the company over to financial backers that include Blackstone Group LP’s credit arm, Monarch Alternative Capital LP and Cyrus Capital Partners LP, WSJ Pro Bankruptcy reported. The balance-sheet restructuring, approved yesterday by Judge Kevin Gross of the U.S. Bankruptcy Court in Wilmington, Del., calls for senior and junior bondholders of the Columbus, Ohio-based manufacturer to take ownership of the business from Apollo Global Management LLC. The reorganization plan, which received near-unanimous approval by the creditors who voted on it, will reduce Hexion’s debt to $1.5 billion from $3.5 billion, with $2 billion being converted into equity. The multinational company, in which Apollo has backed for 14 years and holds a 90 percent stake, is also looking to sell at least $100 million in Hexion stock through an initial public offering, according to court papers. The company’s new board initially will consist of seven directors, including Chief Executive Officer Craig Rogerson. Other directors will be picked by a board committee made up of representatives from Cyrus, Monarch, Blackstone’s GSO Capital Partners, GoldenTree Asset Management LP, Brigade Capital Management LP and Davidson Kempner Capital Management LP. Recoveries for the most senior bondholders, owed about $2.4 billion, include $1.45 billion in cash and 72.5 percent of new Hexion common shares. Junior bondholders owed more than $1 billion are receiving 27.5 percent of new Hexion common shares.
