By Aisha Al-Muslim

Frac-sand supplier Covia Holdings Corp. has filed for bankruptcy as part of a plan to cut more than $1 billion in debt and shed its railcar leases after taking a beating from the economic disruption sparked by the coronavirus pandemic and lower energy prices.

The Independence, Ohio, company filed for chapter 11 protection in the U.S. Bankruptcy Court in Houston late Monday after reaching a restructuring support agreement with a group of holders of a majority of its secured debt.

Under the plan, Covia's creditors would own the reorganized company once it emerges from bankruptcy. The current majority owner of the publicly traded company is Belgian mining company SCR-Sibelco NV, which holds 65% of its shares.

Covia has debt of about $1.6 billion, court papers show. The company said its cash reserves of about $250 million will provide liquidity to fund its U.S. operations and manage the reorganization process. Its international units, including those in Canada, Mexico and Denmark, aren't included in the bankruptcy filing.

The company supplies minerals and materials for the production of glass, ceramic tiles, plumbing fixtures, paints, plastics, roofing tiles, filtration media, artificial turf and golfing sands. It reported revenue of about $1.6 billion for 2019, down 11% from $1.8 billion in 2018. Covia has 32 active mining facilities serving more than 2,000 customers and it has about 1,600 employees in the U.S.

"The declines in demand across the energy industry and surplus frac sand supply have fundamentally impaired the debtors' energy segment for the foreseeable future," Covia Chief Financial Officer Andrew Eich said in a sworn declaration with the bankruptcy court.

The bankruptcy comes amid a wave of financial distress sweeping companies that supply the oil-and-gas sector with sand used in fracking. Earlier this month, private equity-backed frac-sand supplier Vista Proppants & Logistics LLC filed for chapter 11 protection. And last week, Hi-Crush Inc. said it was negotiating the terms of a chapter 11 bankruptcy with lenders.

Covia's decision to file for bankruptcy comes after the company found itself with excess railcars, terminals and plant capacity during the energy-industry downturn. The company said its debt payments of about $100 million a year and railcar-related payments of about $90 million a year -- including lease, maintenance and storage costs -- were unsustainable, according to court papers.

The supplier shifted its focus to a prearranged bankruptcy filing after it had explored an out-of-court deal that would have involved restructuring its railcar leases and exchanging debt for equity.

Months ago, Sibelco said it was interested in a deal allowing it to retain control of Covia in exchange for pumping new money into the company. But the companies were unable to reach mutually acceptable terms, Mr. Eich said.

In response, Sibelco said: "Looking to the future, this situation presents Sibelco with a clearer path forward. Sibelco is debt-free and will now be able to concentrate 100% of its resources on growing its core business."

Covia was founded in 2018 through the combination of frac-sand producers Unimin Corp. and Fairmount Santrol Holdings Inc. Fairmount shareholders received $170 million in cash and 35% of Covia, with the rest going to Sibelco, which was the parent company of Unimin. Covia used a $1.65 billion senior secured term loan with Barclays Bank PLC to generate cash for the merger and to repay Unimin and Fairmount's outstanding debts.

Now, Covia is seeking bankruptcy-court approval to temporarily halt trading of its shares in hopes of preserving potentially valuable tax assets that can be used to offset future taxable income. The company had about $291 million in net operating losses as of Dec. 31, court papers show.

The company has hired law firm Kirkland & Ellis LLP, investment bank PJT Partners LP, and financial consulting firm AlixPartners LLP.

Judge David Jones has been assigned the case, number 20-33295.

--Colin Kellaher contributed to this article.

Write to Aisha Al-Muslim at aisha.al-muslim@wsj.com