By Dietrich Knauth

NEW YORK, March 17 (Reuters) - The Lycra Company, a maker of spandex and other stretch fabrics, has filed for Chapter 11 bankruptcy protection in Houston, Texas, on Tuesday, seeking to shed $1.2 billion in debt.

The company's lenders agreed to provide $75 million in new financing and to eliminate most of the company’s $1.53 billion in existing debt, according to court filings. The company said the restructuring will not affect its manufacturing operations, customers, vendors or employees.

Lycra said it has near unanimous support from its lenders for a "prepackaged" restructuring, and it expects to emerge from bankruptcy within 45 days.

The Wilmington, Delaware-based Lycra Company had been stretched thin for years, following a 2019 acquisition by Chinese textile company Ruyi Textile and Fashion International Group Limited, according to court filings. Lenders took over the business in 2022 after the company defaulted on its debt, but the company continued to underperform due to decreased demand, increased competition from lower-priced generic spandex products, unpredictable U.S. tariffs and lingering legal disputes with its former owners in China, according to the company.

The company, founded in 1958 as part of DuPont de Nemours Inc., was the original producer of spandex, and it remains one of the world’s leading spandex innovators, according to the company. It has eight manufacturing facilities, three research labs and 11 offices across North America, Europe, Asia, and South America, with 2,000 employees worldwide.

The case is The LYCRA Company LLC, U.S. Bankruptcy Court for the Southern District of Texas, No. 26-90399

For the debtors: Michael Torkin, Daniel Guyder, Christopher Hunker, Clark Xue and Ramsey Scofield of Linklaters LLP; Charles Beckham, Kenric Kattner, Arsalan Muhammad, and Kourtney Lyda of Haynes and Boone, LLP

Read more:

Fashion group Shandong Ruyi's creditors take full control of Lycra

(Reporting by Dietrich Knauth)

((Dietrich.Knauth@thomsonreuters.com;))