Silicone and quartz producer Momentive Performance Materials (MPM) is said to be close to filing for U.S. Chapter 11 bankruptcy protection as the company belonging to private equity group Apollo strives to reduce its debt burden of around $3 billion and kick-start restructuring.

Put together from assets formerly owned by GE, Bayer and Toshiba, MPM has found it hard to repay what it says is "a substantial amount of institutional debt," due to continued weakness in demand and overcapacity in its industry.

Apollo acquired the holding for MPM and sister firm Momentive Specialty Chemicals, formerly trading as Hexion Specialty Chemicals, for $3.8 billion in 2006 and is said to have saddled the first company with additional debt ahead of a recession that fueled oversupply in the silicone market.

Any bankruptcy filing would exclude the specialty chemicals producer, described as having a "solid" financial position.

MPM expects figures for 2013 to show a net loss of around $465 million after a $365 million net loss in 2012, driven primarily by non-cash adjustments related to concerns about its ability to continue as a going concern.

News agencies have reported that a group of  secured debt holders holding a substantial portion of MPM's $1.1-billion, 8.875% first lien notes due in 2020 have selected New York law firm Dechert as counsel in connection with any potential restructuring of the company.