Ascend Performance Materials files for bankruptcy

Houston-based Ascend Performance Materials, which is a majority partner in the recycling-focused Circular Polymers by Ascend joint venture (JV) in Lincoln, California, has initiated Chapter 11 cases in the U.S. Bankruptcy Court for the Southern District of Texas.

The firm says the filings have been made with the support of its key stakeholders and with the intention to “strengthen its balance sheet and position the company for a stronger future.”

Ascend says it will continue providing "best-in-class materials" to nearly 1,650 customers globally, and that its subsidiaries located outside the United States are not included in the Chapter 11 filings. On its website, Ascend lists production facilities in China, India and Mexico and sales and service offices in China, Europe, India Japan, South Korea and Taiwan.

In the U.S., the company’s Circular Polymers JV offers "disruptive technology" that transforms postconsumer discarded carpet into new polymer raw materials for use by multiple industries.

Circular Polymers produces Cerene-branded polyethylene terephthalate (PET), polypropylene (PP) nylon 6,6 and nylon 6 derived from postconsumer carpet collected in California, where a product stewardship system is in place to help fund carpet recycling.

“We have exclusive North American rights to the [St. Louis-based] Broadview Group’s rotary impact separator technology, which efficiently separates shredded postconsumer carpet into the face fiber, backing and calcium carbonate,” the firm says.

In connection with the Chapter 11 process, Ascend says it has received a commitment for $250 million in debtor-in-possession financing from its lenders, which the firm says will provide it “with sufficient liquidity to support Ascend throughout the Chapter 11 process.” Ascend intends to complete that process in approximately six months.

“Over the last several months, we have been working with our lenders to define the best path forward for Ascend,” Ascend Performance Materials President and CEO Phil McDivitt says.

“We expect that the restructuring will substantially reduce Ascend’s funded debt obligations and ensure that we are well-positioned to continue executing on our long-term strategy. We are confident that the Chapter 11 process will put us on a path to becoming an even stronger company with a healthier financial structure and better positioned to continue delivering high-performance materials that improve the lives of our customers.”

Ascend has filed customary first-day motions with the court seeking approval to support its operations during the Chapter 11 process, including paying employee wages, salaries and benefits without interruption. The firm expects to receive approval of these motions and will says it will pay vendors and suppliers in full for goods and services provided on or after the filing date in accordance with the Bankruptcy Code.

The polymers company is being advised in the filings by Kirkland & Ellis LLP as legal counsel, FTI Consulting as financial advisor and PJT Partners as investment banker. An ad hoc group of first lien lenders to the company is being advised by Gibson, Dunn & Crutcher LLP as legal counsel and Evercore Group LLC as investment banker.