Libbey, one of the world’s biggest makers of glass tableware, submitted Chapter eleven bankruptcy on Monday, citing the “unprecedented” affect of the coronavirus pandemic on demand for its items.
The organization experienced been pursuing a restructuring of its harmony sheet even before the pandemic compelled it to shut its factories in Toledo, Ohio, and Shreveport, La., and nearly shut down its restaurant product sales channel.
A 7-calendar year, $440 million bank loan was scheduled to experienced last thirty day period.
But Libbey explained Monday that it experienced been “unable to offset the steep decrease in sales” resulting from the pandemic, leaving it with no selection but to file bankruptcy for the to start with time in its 202-calendar year record.
“While we entered 2020 with good momentum from our strong finish in 2019, the spectacular and prolonged affect of COVID-19 on the demand for our items and on our enterprise is definitely unprecedented in Libbey’s additional than two hundred-calendar year record,” CEO Mike Bauer explained in a information release.
Libbey’s loan providers have agreed to present up to $one hundred sixty million in financing to maintain it working for the duration of the Chapter eleven process. “Entering this process is a necessary phase to deal with our liquidity, improve our harmony sheet and better place Libbey for the future,” Bauer added.
The organization, which was founded in 1818 as the New England Glass Organization, sells items such as tumblers, stemware, mugs, bowls, shot eyeglasses, canisters, and candleholders by food items-services, retail and enterprise-to-enterprise channels.
Food-services product sales in the U.S. and Canada have been declining owing to “take-out and supply escalating in recognition relative to in-restaurant eating,” Brian Whittman, Libbey’s restructuring consultant, explained in a courtroom declaration.
Other headwinds, he explained, have provided the migration of purchaser paying for from brick-and-mortar retailers to on-line commerce and “increased competitive pressures in Latin The us, as Chinese suppliers divert product sales of their items from the U.S. market to Latin The us in get to keep away from the increased tariffs imposed by the United States on Chinese imports.”
Bauer explained Libbey is currently looking at some advancement in demand with the gradual lifting of stay-at-dwelling restrictions and the resumption of production in Toledo and Shreveport.