Libbey Files Chapter 11 Amid ‘Dramatic’ Slump
Libbey, 1 of the world’s most significant makers of glass tableware, submitted Chapter 11 individual bankruptcy on Monday, citing the “unprecedented” impression of the coronavirus pandemic on demand for its items.
The business had been pursuing a restructuring of its harmony sheet even just before the pandemic compelled it to near its factories in Toledo, Ohio, and Shreveport, La., and nearly shut down its restaurant profits channel.
A 7-calendar year, $440 million financial loan was scheduled to experienced very last thirty day period.
But Libbey explained Monday that it had been “unable to offset the steep decline in sales” resulting from the pandemic, leaving it with no choice but to file individual bankruptcy for the 1st time in its 202-calendar year heritage.
“While we entered 2020 with favourable momentum from our sturdy end in 2019, the extraordinary and prolonged impression of COVID-19 on the demand for our items and on our small business is truly unprecedented in Libbey’s additional than two hundred-calendar year heritage,” CEO Mike Bauer explained in a news launch.
Libbey’s lenders have agreed to deliver up to $one hundred sixty million in financing to maintain it working for the duration of the Chapter 11 method. “Entering this method is a necessary move to handle our liquidity, bolster our harmony sheet and far better situation Libbey for the future,” Bauer added.
The business, which was founded in 1818 as the New England Glass Business, sells items these as tumblers, stemware, mugs, bowls, shot glasses, canisters, and candleholders by meals-assistance, retail and small business-to-small business channels.
Meals-assistance profits in the U.S. and Canada have been declining thanks to “take-out and delivery growing in popularity relative to in-restaurant eating,” Brian Whittman, Libbey’s restructuring consultant, explained in a court docket declaration.
Other headwinds, he explained, have provided the migration of purchaser purchasing from brick-and-mortar merchants to on the web commerce and “increased aggressive pressures in Latin The us, as Chinese producers divert profits of their items from the U.S. market place to Latin The us in purchase to stay away from the improved tariffs imposed by the United States on Chinese imports.”
Bauer explained Libbey is now looking at some enhancement in demand with the gradual lifting of keep-at-home restrictions and the resumption of production in Toledo and Shreveport.
