Libbey Files Chapter 11 Amid ‘Dramatic’ Slump
Libbey, one of the world’s most significant makers of glass tableware, filed Chapter 11 personal bankruptcy on Monday, citing the “unprecedented” effect of the coronavirus pandemic on demand for its merchandise.
The enterprise experienced been pursuing a restructuring of its harmony sheet even prior to the pandemic pressured it to close its factories in Toledo, Ohio, and Shreveport, La., and practically shut down its cafe profits channel.
A seven-year, $440 million loan was scheduled to mature very last thirty day period.
But Libbey explained Monday that it experienced been “unable to offset the steep decline in sales” resulting from the pandemic, leaving it with no decision but to file personal bankruptcy for the initial time in its 202-year background.
“While we entered 2020 with positive momentum from our sturdy complete in 2019, the remarkable and extended effect of COVID-19 on the demand for our merchandise and on our enterprise is definitely unprecedented in Libbey’s more than 200-year background,” CEO Mike Bauer explained in a information release.
Libbey’s loan companies have agreed to provide up to $160 million in funding to maintain it working for the duration of the Chapter 11 course of action. “Entering this course of action is a essential phase to tackle our liquidity, strengthen our harmony sheet and superior position Libbey for the upcoming,” Bauer added.
The enterprise, which was founded in 1818 as the New England Glass Company, sells merchandise this kind of as tumblers, stemware, mugs, bowls, shot eyeglasses, canisters, and candleholders by means of foodstuff-services, retail and enterprise-to-enterprise channels.
Food-services profits in the U.S. and Canada have been declining thanks to “take-out and delivery expanding in recognition relative to in-cafe eating,” Brian Whittman, Libbey’s restructuring consultant, explained in a court declaration.
Other headwinds, he explained, have involved the migration of purchaser obtaining from brick-and-mortar suppliers to on-line commerce and “increased competitive pressures in Latin America, as Chinese brands divert profits of their merchandise from the U.S. current market to Latin America in purchase to keep away from the increased tariffs imposed by the United States on Chinese imports.”
Bauer explained Libbey is previously viewing some improvement in demand with the gradual lifting of stay-at-home restrictions and the resumption of output in Toledo and Shreveport.
