Libbey, a single of the world’s largest makers of glass tableware, filed for Chapter eleven individual bankruptcy on Monday, citing the “unprecedented” impact of the coronavirus pandemic on desire for its products and solutions.
The company experienced been pursuing a restructuring of its harmony sheet even right before the pandemic forced it to shut its factories in Toledo, Ohio, and Shreveport, La., and pretty much shut down its cafe profits channel.
A seven-12 months, $440 million personal loan was scheduled to mature previous month.
But Libbey explained Monday that it experienced been “unable to offset the steep decrease in sales” resulting from the pandemic, leaving it with no alternative but to file individual bankruptcy for the 1st time in its 202-12 months heritage.
“While we entered 2020 with favourable momentum from our powerful complete in 2019, the dramatic and prolonged impact of COVID-19 on the desire for our products and solutions and on our business enterprise is truly unprecedented in Libbey’s extra than two hundred-12 months heritage,” CEO Mike Bauer explained in a information launch.
Libbey’s creditors have agreed to provide up to $one hundred sixty million in financing to continue to keep it operating throughout the Chapter eleven approach. “Entering this approach is a vital action to deal with our liquidity, fortify our harmony sheet and much better placement Libbey for the long term,” Bauer included.
The company, which was launched in 1818 as the New England Glass Enterprise, sells products and solutions these kinds of as tumblers, stemware, mugs, bowls, shot glasses, canisters, and candleholders through meals-services, retail and business enterprise-to-business enterprise channels.
Meals-services profits in the U.S. and Canada have been declining thanks to “take-out and supply growing in attractiveness relative to in-cafe eating,” Brian Whittman, Libbey’s restructuring consultant, explained in a courtroom declaration.
Other headwinds, he explained, have incorporated the migration of consumer purchasing from brick-and-mortar stores to online commerce and “increased aggressive pressures in Latin The united states, as Chinese producers divert profits of their products and solutions from the U.S. current market to Latin The united states in purchase to stay clear of the improved tariffs imposed by the United States on Chinese imports.”
Bauer explained Libbey is now looking at some advancement in desire with the gradual lifting of remain-at-dwelling limitations and the resumption of manufacturing in Toledo and Shreveport.